Home > Income Tax > Business or Profession > Rent,Repairs,Insurance etc. – Sec 30

Rent,Repairs,Insurance etc. – Sec 30

U.C Date : 25 Feb 2015

The following expenses are allowed as deduction from income of Business or Profession:-
+ Amount spent on repairs to the premises.
+ Amount paid for land revenue, local rates and municipal taxes subject to Sec 43B.
+ Insurance Premium paid for covering risk of damage of premises.
+ Rent paid for the premises.
+ Amount spend on repairs by tenant is allowable as deduction to the tenant.

Notes:- If any amount is incurred as capital expenditure, then it is not allowed as deduction. But depreciation can be claimed on such amount.
If capital expenditure is incurred by tenant, then depreciation is allowed to tenant only.
If expenditure incurred or asset used partly for business and partly for other purpose, the only proportionate amount is allowed as deduction. [ Sec 38 ]

Bare Act for Sec 30

Bare Act for Sec 30

In respect of rent, rates, taxes, repairs and insurance for premises, used for the purposes of the business or profession, the following deductions shall be allowed—

(a) where the premises are occupied by the assessee—

   (i) as a tenant, the rent paid for such premises ; and further if he has undertaken to bear the cost of repairs to the premises, the amount paid on account of such repairs ;

  (ii) otherwise than as a tenant, the amount paid by him on account of current repairs to the premises ;

 (b) any sums paid on account of land revenue, local rates or municipal taxes ;

(c) the amount of any premium paid in respect of insurance against risk of damage or destruction of the premises.

[Explanation.—For the removal of doubts, it is hereby declared that the amount paid on account of the cost of repairs referred to in sub-clause (i), and the amount paid on account of current repairs referred to in sub-clause (ii), of clause (a), shall not include any expenditure in the nature of capital expenditure.]

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