look news india
Budget 2024 : Finance Minister Nirmala Sitharaman has made a new provision in the budget to curb those declaring residential rental income as business income. Rental income is to be shown under the head of house property income, but taxpayers were under-reporting the income to avoid paying tax by declaring it as business income.
It has been decided to implement this provision from April 1, 2024 so that residential rental income is not recognized as business income. Some taxpayers call their rental income as business income to avoid income tax. In these, the income was understated after various expenses including men's salary, depreciation of vehicles, computers etc., travel expenses.
In this way they were evading income tax. Chartered accountant Ankit Mehta says that this fact came to the notice of the Finance Ministry due to online returns and the use of artificial intelligence. Similarly, in case of sale of immovable property worth more than Rs. 50 lakh, the buyer is required to deduct TDS at the rate of one per cent on the total sale amount under section 194IA. But some taxpayers have the same property in the name of two or more persons and the amount payable to them is less than Rs. 50 lakh. TDS was not deducted from the amount payable to them in cases of less than Rs. 50 lakh.
For example, a property worth Rs. 60 lakhs is sold. There are two claimants to this property. So they are paid Rs. 30 lakh each. In such deals some taxpayers did not deduct personal amounts less than Rs. 50 lakhs. With an intention to close this loophole in the law, one per cent TDS per property has been made mandatory if the value of the property exceeds Rs. 50 lakhs.
