Deemed property valuation for Income from House Property

Ensuresap · Post by **Ensuresap** » Sat Jul 16, 2011 11:44 pm

Hi,
I went through threads and understand in case more than one properties are owned, one of the property (as per tax filer's choice) is considered as deemed let out and annual letable value /FMV or standard rent to be reported under Income from house property with some allowed deductions.

Now question is
1) how does the annual letable value is determined? Can I take any value based on the current real estate ads in area .

Being NRI my house is transferred by my father in my name and my sister stays there. and I have bought own property which I am using for my self.

So do I have to report property used by my sister as deemed let out and get taxed or any relief is available.

Thanks

dbs · Post by **dbs** » Sun Jul 17, 2011 2:54 pm

Some tax expert can advise on whether any relief is available in the given situation.
If not,

I have an alternative. This absolutely depends on your relationship with your sister.

Get her to agree to a rental agreement duly signed and registered. The rent can be shown as Rs. 1000 - 10000/pm depends on your comfort level. This will become your rental value.

She can pay you the amount every month and you can gift her back the amount every year with no gift tax atleast at present.

I do not think it is immoral as actually you are not getting any income. The rules are made to catch evaders and some times innocent get pulled in.

anuj106 · Post by **anuj106** » Thu Oct 20, 2011 11:27 pm

The only catch in idea promoted by dbs is that fair rental value of that property can exceed the rent received from sister. You can get the rental rates from local market and then follow the route suggested by dbs.

Anuj

anuj106 · Post by **anuj106** » Wed Oct 26, 2011 12:08 pm

Also the rent from property shall be taxable as income in India.

Anuj