April 29, 2014 8:57 am
When my landlord takes 10 month’s rent as deposit, does (s)he need to pay tax on that amount?
Dear Sambaran, please check below for you reference.
Thanks Ashal. Could you show me the link/section-of-IT-act which specifies the same?
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.
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.
Dear Sambaran, after paying the deposit are you paying regular rent also or is it 10M rent in advance?
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