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Deduction for house repairs not flexible
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newsbyte on 07 May, 2008 02:57:23
 
Kamal Rathi
Q I have invested Rs 12 lakh of my retirement benefits in Senior Citizen Saving
Scheme in April 2006. In June 2007, I foreclosed the deposit. Following which,
bank authorities paid me Rs 19,583 towards interest and deducted Rs 18,000 for
foreclosure charges. However, they deducted Rs 2,017 as TDS, despite my
effective income from the deposit is Rs 1583 only. Please let me know how I can
claim refund of the excess tax deducted?
K.V. Krishnamoorthy
Via email
A In my opinion, the amount of penal charges of Rs 18,000 for foreclosure of
your Senior Citizen Saving Scheme may not be allowable against the interest
income of Rs 19,583.
Q My income from house property is Rs 80,000 and this year I have incurred
expenditure Rs 1.4 lakh towards repairs. The usual deduction of 30 per cent
allowed as per Section 24(a) may not be ample to cover the actual expenditure.
Can I claim the actual expenditure incurred as ‘Loss from House Property’ or
do I have to restrict my repairs expenses to 30 per cent?
Parmeshwaran
Via email
A According to Section 24(a), income from house property has to be computed
after making a deduction of 30 per cent from the annual value. The deduction
pertaining to Section 24(a) is restricted to 30 per cent of annual value
irrespective of the actual amount incurred. Hence, the actual expenditure of Rs
1.4 lakh will not be allowed as deduction. The maximum deduction you can claim
is Rs 24,000, i.e. 30 per cent of Rs 80,000. You should also note that deduction
of 30 per cent is allowed irrespective of the fact whether the expenditure is
incurred or not.
 
(Kamal Rathi is a chartered accountant, representing Rathi & Malani, a
Hyderabad-based
accounting firm. Readers can mail their queries on income-tax
tokamalrathi.ca@gmail.com)