S. Murlidharan

I plan to sell my Chennai property at Rs 30 lakh. Am I required to fill Form 37-1? Why?

S.K. Nachiappan, Chennai

This requirement does not apply to transfers effected on or after July 1, 2002. The requirement was meant to check the incidence of black money in real estate transactions. The authority had the power to acquire the property at the price declared in Form 37-1 if it suspected under-reporting of the true consideration. But people frustrated the government's design by going in for multiple sale deeds. Today, under the new regulation, the consideration declared by you would be set aside if it is less than the one fixed by the stamp duty authorities.

Presumptuous?

Why am I allowed only 30 per cent standard deduction from my rental income? I have incurred a lot more in renovation and repair expenses.

Naina Khubchandani, New Delhi

Historically the government has been in favour of subjecting income from house property to presumptive taxation which is why instead of taxing the actual rental income it goes by annual value, which is the higher of actual rent and the fair rent or market rent, if you like. This was evidently done to check black money transactions, where landlords often issued receipt for lesser sum than the actual amount received. The same rationale was extended recently to capital gains tax for house properties by substituting the valuation made by stamp duty authorities in place of the actual consideration whenever the latter is lower than the former. It is in the same vein that expenses are also allowed only on a presumptive basis with the assumption that 30 per cent should take care of all expenses save the interest. One can't possibly complain as this presumptive regime cuts both ways — you get 30 per cent even when you have not incurred anything at all!

The author is a Delhi-based chartered accountant.

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