Does a landlord need to pay tax on security deposit ?

POSTED BY Sambaran Mitra ON April 29, 2014 8:57 am COMMENTS (5)

When my landlord takes 10 month’s rent as deposit, does (s)he need to pay tax on that amount?


5 replies on this article “Does a landlord need to pay tax on security deposit ?”

  1. ashalanshu says:

    Dear Sambaran, please check below for you reference.

    caclubindia. com/forum/rent-income-small-rent-big-security-deposit-dilemma-278513.asp#.U2EZ14H7I8o



  2. Sambaran Mitra says:

    Thanks Ashal. Could you show me the link/section-of-IT-act which specifies the same?

  3. ashalanshu says:

    Dear Sambaran, the security deposit is non taxable but in case land lord invests the money some where and earns any income from security deposit, that income may be taxable depending upon the nature of income and instrument, the money invested in.



  4. Sambaran Mitra says:

    There will be regular rent also. The 10M rent is a refundable security deposit in hands of landlord if tenant turns nasty. That money is supposed to be returned back to tenant at the time of vacating the property.

  5. ashalanshu says:

    Dear Sambaran, after paying the deposit are you paying regular rent also or is it 10M rent in advance?



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