Hargun gave his house on monthly rent of ₹ 40,000 whereas the expected rent of the property was ₹ 25,000 per month. He also took an interest free refundable security deposit of ₹ 20,00,000. The Assessing officer opined that notional interest on ₹ 20,00,000 should also be charged to tax as income from House property applying the provisions of Section 28(iv). Choose the right option.
A. Notional interest shall be taxable as income from house property.
B. Notional interest should be added to the expected rent and then compared with actual rent.
C. Notional interest shall be taxable as income from business and profession as per section 28(iv).
D. Notional interest is not taxable.
Answer:D
Hargun gave his house on monthly rent of ₹ 40,000 whereas the expected rent of the property was ₹ 25,000 per month. He also took an interest free refundable security deposit of ₹ 20,00,000. The Assessing officer opined that notional interest on ₹ 20,00,000 should also be charged to tax as income from House property applying the provisions of Section 28(iv). Choose the right option.
A. Notional interest shall be taxable as income from house property. B. Notional interest should be added to the expected rent and then compared with actual rent. C. Notional interest shall be taxable as income from business and profession as per section 28(iv). D. Notional interest is not taxable.