Hi friends, how are you all?
Sir, we are very good. I am also very good.
Sir, my name is C.S. Shreya Gupta and I welcome you all to
our 3rd lecture.
3rd lecture was on income under house property.
Today's session is going to be on that.
And our discussion was going on on house property.
We have covered some topics till now.
We have covered charging section.
We have discussed about composite rent in last lecture.
And today we want to take that discussion forward.
One thought came to my mind and I thought to share that
with you all.
Friends, never copy anyone in your life.
Whatever work you like, whatever is better for you,
whatever you understand, always do that in your life.
No matter what people say.
Recognize your USP.
Unique selling point.
Every product has a USP.
And because of that USP, that product is sold in the market.
God who created this earth has also sent a hidden USP to
every person.
The problem is that we are not able to recognize that USP.
If you recognize your talent and put a tough test on it,
you will get such results, friends.
Your name will become so famous that not only in India, but
your name will spread in foreign countries.
Like how Modi ji is spreading.
Not only in India, friends, even outside this country,
there will be property.
But don't think that if you put rent on foreign property,
you won't get tax on it.
You will get tax on the USP as well.
Imagine, friends, let's move on to the next topic.
Sir, you made a rhythm.
Yes, sir.
You made a rhythm, sir.
Also, income from household properties situated outside
India.
This is our topic for now.
For example, you have Indian citizens.
But you also have Indian properties in foreign countries.
Many people do this, they live here and keep their
properties in foreign countries.
Like Vijay Mallya, you must have heard his name.
In fact, he is a very famous Bollywood superstar.
I have put his photo as well.
He is Shah Rukh Khan.
In Dubai, he has a bungalow called Jannat.
Bombay people call it Mannat.
Dubai people call it Jannat.
He gifted it to his wife, Srimati Gauri Chhabar Khan.
Imagine, if the bungalow of Jannat is in Dubai, and
tomorrow he rents it out, then what will happen?
If he rents it out in Dubai, and the money will be received
in Dubai's account.
India is not coming with that money.
They keep that money in Dubai.
Then what will happen?
Will there be a tax?
Will there be a tax on house property in India?
Yes or no? Think about it.
Friends, the answer is yes, there will be a tax.
There will be a tax because he is a citizen of India.
He is a resident.
We have already covered the topic of resident earlier.
So, if he becomes a resident of India, then he will follow
the conditions.
He is a resident of India.
If he follows the conditions, then the rent he receives in
Dubai, even if he does not come with that money to India,
even then, his income will be taxable in India.
Because, as I told you, the global income of a resident,
guys, look here, the global income, the income of the
entire world, the Indian citizen, wherever he earns money,
he has to pay tax in India.
But, keep in mind a catch point with this, that the
government gives you a relief, because on that money, he
will have to pay tax in Dubai as well, and here as well.
So, the government of India, or the government of Dubai,
whichever of the two, will give a relief of money to the
government.
Ultimately, he will have to pay tax in the same place.
In the case of non-residents, guys, if there is a
non-resident, for example, a man named Putin Choudhary,
Putin, his name is Choudhary, and he is a resident of
Germany.
Or, let's say he is a resident of Russia.
So, he is a resident of Russia.
A resident of Russia, a resident of Russia,
Mr. Putin,
Putin Choudhary, we cannot take his full name, because, we
also think, we also want to see the future, friends.
So, a resident of Russia,
Mr. Putin,
Putin Choudhary, he is a resident of Russia.
So, in that case, what will happen?
In that case, if he receives any money in India, his rent,
it is a foreign property, foreign property, it is rented
abroad, but, if he receives money in India, if he receives
money here, in India, then, tax will be imposed on the
house property.
A resident,
Shah Rukh Khan, if he rents in Dubai, then tax will be
imposed, because, his income is taxable worldwide.
But, if he is a non-resident, or a non-resident, he rents
his house abroad, but, if he receives money in India, then,
income tax will be imposed here, in India, friends.
This topic, is a small topic, but, it was an interesting
topic, and an easy topic as well.
So, this topic ends here.
And, the next most important topic, of this entire chapter,
if you understand this, then, there is nothing to assume,
about the house property.
And, I will make a pudding out of it, this is my guarantee.
There is nothing in this chapter.
Now, you will say, sir, you have been talking to the last
three lecturers, about annual value, annual value, annual
value, or, you talk about, house property, house property,
or, you talk about, taxable house property, taxable house
property, what is this annual value, or, how do we tax
this, in house property, in house property, how do we tax
this, there must be some procedure, there must be some
procedure, till now, you have been telling a story, how do
we do that, how do we do that
how do we do that procedure, so, I will tell you, that
friends, first of all, a word comes, gross, annual, value,
yes friends, what did I say, gross, gross annual value,
gross annual value,
I said,
gross annual value,
the gross, that is,
G A V, short form, this form, gross, annual value,
G A V, from this, you have to, minus something, what do you
have to do, municipal tax,
I will tell you everything, in detail, you can copy it, and
write it down, if you want, you can note it in a copy, if
you want,
from gross, if you minus your municipal tax,
you will come to N A V, which is called, net annual value,
from this, you get some deductions, which the government
gives you,
after that, this value comes out, where I have ticked,
this is income from house property, on this, tax is
applied, what are the simple things, you don't have to
understand now,
I will explain one by one, don't take tension, brother has
come, he will explain and go,
first of all, gross, annual value, from that, you have to
minus, municipal tax,
after that, from gross, if you minus anything, what
happens, net, net annual value, from that, some deductions
are there, if you minus that, then your income, under head,
house property, will come,
so sir, how to do it, what is it,
I will tell you, if you want to understand it, in simple
language,
then you take two cases, in life,
that suppose, you have two houses,
one you have, rented, in one, you live,
if you take this example, then you will feel, everything is
easy,
you have two houses,
one you have, rented, in one, you live, in that house, ok,
any problem, in understanding, no problem,
so, first of all, let us cover the case,
of that, of that house, which you have, rented, the one,
who has rented, you, you remember, because, in starting,
your question is, that sir, we live in our house, so, will
we pay tax, in our house also, all those points,
I will cover all those points, so, let us start, from that
house, which you have, rented, the house, which you have,
let out, how is its taxation,
I will tell you, friends,
see, friends, this is the house, which you have, rented,
this is your house,
in drawing, as I said, my hand is tired, so, forgive me,
suppose, you have, rented the house, for the whole year,
for the whole year,
means, for 12 months, you have, rented the house, this is
the case,
first case is,
that you have, rented the house, for 12 months, for 12
months, you have, rented the house, you have, earned some
rent, now, for this, first of all, what did we say, what is
the step, first of all, what will we do, gross annual
value, will be taken out, step by step, there is no
problem, no tension, you have to have confidence.
You know everything.
I am guaranteeing you.
Now, I will tell you how to do GAB calculation.
You have to compare two things.
Let me remove this.
Let me clean this.
You have to compare the whole year. One thing is ER.
Versus ER.
Sir, what are you writing? Are you mad?
I am not mad. I am just trying to make you understand in a
simple way.
Till now, what have I explained?
There is a format in which gross annual value is subtracted
from the municipal tax.
So, you will come to the net. Reduce some deductions from
the net.
So, income will be deducted from the tax.
Now, how to calculate the gross?
I am explaining that.
And I am explaining that house which is on rent.
First, let us understand that. We will understand the rest
later.
The house which you have rented and you have been renting
it for the whole year.
How to calculate that?
You have to compare two things always.
ER and AR.
AR means actual rent.
What did I say?
AR means actual rent.
Actual means the rent in reality.
Suppose, I have rented this house for Rs. 10,000 per month.
So, my actual rent will be Rs. 10,000 per month.
Is there any problem in understanding this?
There is no problem, sir.
Suppose, I have rented a shop for Rs. 25,000 per month.
So, my actual rent will be Rs. 25,000 per month.
Is there any problem?
Is this clear?
This is called actual rent.
Now, come to ER.
ER means expected rent.
Expected.
What I expect.
What the government expects.
That this person will definitely earn this much rent.
You will get your income in house property.
Your objective will be to show minimum income.
And what will be the objective of the government?
That we show maximum income so that we get maximum tax.
Your objective will be to show minimum income so that we
get minimum tax.
So, there will always be a difference between the
government and a citizen.
So, you have told that this is actual.
See, this is actual.
It is Rs. 10,000 per month.
See, I have a paper.
This is it.
But the government will say that it is not like that.
It is so easy and the work is done according to the papers.
So, I don't know what would have happened in this country,
friends.
The government said that such work will not be done.
You have the actual.
Very good.
But we will go according to the expected.
Expected means what we expect.
What we think your rent should be.
So, there are two ways to calculate this too.
One is fair rent.
Or one is municipal value.
What have I written?
What are we doing? First tell me.
We are calculating gross annual value of a house which I
have rented for a whole year.
I have told the government that this is my actual rent.
According to this, this is the minimum tax.
The government says that this is the actual rent.
First tell us.
We hope that you will get this much tax.
So, I went to the government again.
I said that how did you find out that this much tax is
there?
So, the government said that come here.
Sit here.
Drink this water.
And we will teach you.
They said that in the expected rent,
we have compared the fair rental value with the municipal
value.
Sir, what are you making me do?
You will go mad.
Sir, I am leaving.
Wait, there is nothing.
This is the last one.
This is the last chapter.
There is nothing left.
Listen to me.
Fair rental value
versus municipal value.
This is what the government is calculating for us.
Think about it.
In a way, this is the government's calculation.
Fair rental value means fair.
What does fair mean?
What should be there?
What is its fair value?
What should be there?
What is its value in the market?
In a way, what is its market value?
You are saying that you have paid Rs. 10,000 per month for
the rent of your house.
But what is its value in the market?
What if the rate in the market is Rs.
and you are lying to us that you have paid Rs. 10,000 per
month for the rent.
So that your tax becomes less,
your income becomes less.
This is also possible.
So, what is its market rate?
The simple thing is this.
Whose?
Market rate.
What is it?
Market
rate.
Market value.
What is its market rate?
Rent.
What is the rate in the market?
Whenever you go to rent,
you ask the property dealer.
When someone tells you that this is okay,
it is of this value.
But what is the rate in the market?
Fair value.
And who do we compare this with?
We compare this with municipal values.
Municipal means
our municipalities.
Wherever you live,
your municipality maintains a record
of properties and their rates.
According to the government,
what are the rates?
So that when you pay property tax tomorrow or when you pay
your municipal tax tomorrow,
you will pay according to that value.
The government calculates the municipal value.
You will get it on the government's website.
If you search on Google,
it is not a big deal.
If you search on Google
about the municipal value of your area,
you will see somewhere
what the value is.
Because the government calculates the property tax
on this value.
So what will the government do now?
What were we doing with ER?
We compared two things.
What is the rate in the market?
First tell me this.
And what do we say?
According to our list,
what is the value?
Out of both,
the government will take the most.
Suppose you tell me
what my actual rent is.
For example, you tell me
my actual rent is 15,000.
In our example.
It was not 15,000, it was 10,000.
You told me it was 10,000.
It was my rent.
Then we came to the expected rent.
The government said
this is not how it works.
First we will calculate on the expected rent.
So according to the government,
we saw in the market value
what is the rate in the market
where your property is,
what is the rate in that street,
what is the rate in that district,
or what is the rate on the next road
of that area,
it was 11,000.
You said,
really?
The rate was 15,000?
No problem,
how will you compare it?
You will compare it with the list
of municipal values.
The government will give you a list
that these are the properties,
these come in this area,
and this is the rate of this area.
So according to that rate,
what is your value?
11,000.
See,
think logically,
the government wants more income.
The more income the government
will give you,
the more tax you will get.
So the government's objective
is to loot more than you,
so you will get confused
whether to take the upper one
or the lower one.
So whatever is more,
you have to take it.
Which one is more,
15,000 or 11,000?
This is 15,000.
How is this being compared?
With 10,000.
What is more in both?
15,000.
So what will be the annual value
of your house?
What should be the gross annual value?
15,000.
Now think,
you said 10,000,
you would have given tax on 10,000
and left.
The government will give you 15,000.
This is their job.
Think about it.
If I work according to the actual rent, if I pay the actual
rent, it will be Rs. 10,000.
It doesn't work like this.
It was such a complex calculation.
I am explaining it again. Understand it once.
First of all, what were we doing?
What are we doing and why are we studying?
We were extracting GAV.
We were extracting this.
Who were we extracting this from?
We were extracting a house property which was on rent for
12 months of the year.
Then what did we do?
We first told the actual that this is the actual.
This is Rs. 10,000 per month, the actual rent.
We told the actual.
I will just clear it so that you don't have any problem.
One second, what happened here?
I think it's gone.
Let me try to explain it to you.
I think the pen won't work.
Doesn't matter.