02-02-2011, 02:48 PM
Dear,
As far as ITO is concerned, there is no such specification as to how these transactions be settled.
However, similar situation is existed in secion 89, where such income is to be treated on the discretion of tax payer.
The same may be applicable to you that you may either pay the tax on whole amount of fair market rent in the year of receipt or you may split the receipt into number of years for which it has been received.
To my apprehension, the second of the two methods will be a viable option for you, provided you are an individual, since in such a case, primary exemption limit of Rs. 150,000 will be applicable to you, and tax will have to be paid on rest of the amount i.e. exceeding Rs. 150,000.
Best Regards,
Faisal.
As far as ITO is concerned, there is no such specification as to how these transactions be settled.
However, similar situation is existed in secion 89, where such income is to be treated on the discretion of tax payer.
The same may be applicable to you that you may either pay the tax on whole amount of fair market rent in the year of receipt or you may split the receipt into number of years for which it has been received.
To my apprehension, the second of the two methods will be a viable option for you, provided you are an individual, since in such a case, primary exemption limit of Rs. 150,000 will be applicable to you, and tax will have to be paid on rest of the amount i.e. exceeding Rs. 150,000.
Best Regards,
Faisal.
