The following deductions are permitted for rent, rates, taxes, repairs, and insurance for real estate used for a trade or profession:

A. If the assessee is the tenant of the property, the amount paid as rent;

If he has agreed to pay for repairs to the property, the amount paid on account of such repairs;
If he is not the tenant, the amount paid by him on account of current repairs to the property;

B. Any amount paid (whether as an owner or tenant) for land revenue, local rates, or municipal taxes; However, these are allowable subject to the provisions of Section 43B[1], meaning that if these expenses are claimed on a timely basis, payment must be made on or before the due date for furnishing the return of income under Section 139(1)[2] [Ref. Para 6.32];

C. Any insurance premium paid (whether as owner or tenant) for coverage against the risk of property damage or destruction

No capital expenditures are included in the amounts paid on account of the cost of repairs mentioned in clause (a)(i) above or the amounts paid on account of ongoing repairs mentioned in clause (a)(ii) above. [Section 30[3] explanation]

[1] Indian Kanoon (Section 43 (b) of Income Tax Act)- https://indiankanoon.org/doc/394567/ [2] Fincash (Section 139 (1) of Income Tax Act)- https://www.fincash.com/l/tax/section139 [3] Indian Kanoon (Section 30 of Income Tax Act)- https://indiankanoon.org/doc/454306/

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SECTION 30 RENT, RATES, TAXES, REPAIRS AND INSURANCE FOR BUILDINGS

Amrit P Mishra

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