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V Nagarajan: Norms for income tax filing for ‘deemed let-out property’ in India
August 05, 2018
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Exclusive to The Gulf Today

We own ancestral property in Ahmedabad. After our parents demise, we are two brothers who inherit the property. How do I declare the income for the Income Tax (IT) purposes as the property is still not given for rent till date?  Please clarify. Deep Purohit, Dubai. 
Under the IT Act, if you own two or more house properties, the property which is not self-occupied is to be treated as a ‘deemed let-out property’ and a notional rent is to be offered to the tax authorities in India.

You are therefore required to offer to tax a notional rent of the ancestral property in the proportion of your respective share in the property.

My property original documents have been lost recently. I am unable to recover it till now. Now I am planning to sell the plot of land in Chennai. How do I proceed to retrieve duplicate copy of my property documents? Maheshwari, Abu Dhabi.
It is necessary to submit original documents now to avoid malpractices.  In order to effect registration of documents, you should (a) lodge a complaint before the concerned police station in whose jurisdiction the document has been lost (b) obtain a copy of ‘not traceable’ certificate from the police station (c) issue an advertisement in this regard in the local newspaper mentioning that you have lost the original document and (d) obtain a certified copy of the document and patta and (e) encumbrance certificate from the date of purchase of property to current date. Once you furnish all the documents you can register your property before the registering authority.

I sold my flat recently and want to utilise the money for the renovation of the existing home in Pune.  Can I claim capital gains tax exemption for the sale proceeds received? Kindly clarify. Nanavati Deshmukh, Sharjah.
As per section 54 of the Income Tax Act, any long-term capital gain due to sale of immovable property shall be exempt if they are invested in the purchase of another residential property within one year before or two years after the due date of transfer of the property sold or construction of residential house within a period of three years from the date of transfer/sale of property.

As the intention of the authorities is to enable an assessee to buy or construct a house, the amount to be spent on the renovation will not be covered under section 54. However, if any new construction is done by way of additional floor it could be allowed. 


India’s residential property sales across top seven cities have revived post demonetisation, rising 25%, in the first six months of the current calendar year, according to Credai and JLL India. Housing sales stood at 64,080 units during January-June 2018 as against 51,452 units in the year ago period.  Sales have picked up by 25% in the first half of this year with the confidence of homebuyers after the implementation of new real estate law RERA. Sluggishness in housing sales, which continued for the past 3-4 years, is over now. 

Of the key cities, Mumbai saw the highest sales volume totalling 13,659 units in the first half of 2018, up 11% from 12,309 units in the year ago.  Bengaluru followed closely with 13,382 units and recorded a marginal increase of 2% in sales from a year ago.  Pune saw a minor increase of 2% in sales volume at 9,988 units.

PE Investments

Indian real estate has attracted private equity (PE) investments worth over Rs 100.8 billion during the latest quarter ended June, driven by institutional investors’ interest in office and retail properties.

While the inflow has witnessed a 22% year-on-year dip, it has still eclipsed investments of the second quarter of the previous 11 years, being the second highest, according to data released by Cushman & Wakefield. 

The office sector is making up for 42% of the net inflow share across the key six segments and the same is expected to remain in focus in the forthcoming quarters also.

As office supply and demand continues to experience a robust increase, coupled with the emergence of co-working spaces in a phenomenal way, the investor confidence in the sector will continue to remain intact.  Retail also continues to grow strong, with declining mall vacancy rates constituting the heightened investor interest in this sector. 

Among the regions, investment inflows in Mumbai slipped this quarter with inflows of Rs28 billion although the country’s commercial capital still receives the highest investments seen among major six cities.

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The author is a business analyst
covering Indian property markets

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