Section 38 - Deductions from Income from Rent
The following expenses shall be deductible in computing rental income, namely:-
(a) the premium paid for any insurance against the risk of loss or destruction of any property;
(b) interest or profit paid on any capital loan taken from any financial institution for the acquisition, construction, renovation, new construction or reconstruction of property;
(c) any tax fee or other annual charge paid on the property, which is not in the nature of a capital charge;
(d) The sums mentioned in the table below for expenditure on repairs, rent collection, water and sewerage, electricity, maintenance and various basic services, namely:-
Table
Sl. No. | Type of Property | Deductible Expenses (as percentage of total rental value) |
(1) | (2) | (3) |
1. | Residential property used for commercial purposes | 30% (thirty percent) |
2. | House property used for non-commercial purpose | 25% – (twenty five percent) |
3. | Other properties (if applicable) | 10% (ten percent): |
Provided that this exclusion shall not apply where the lessee pays the service charge for the expenses mentioned in this clause in addition to the rent of the property;
(e) If any interest or profit has been paid to any financial institution on any capital loan used for acquisition, construction, repair, reconstruction or reconstruction of the property during the pre-rental period, such interest or profit shall be deductable in equal installments for a total of 3 (three) consecutive income years from the relevant income year commencing with the commencement of the rent;
(f) No interest or profit or any part thereof, if any, during the pre-hire period shall be alienable after the period mentioned in clause (e).
Note: This is unofficial English translation. In the event of a conflict between the information on this website and the original Government publications or notifications of laws, rules, regulations, and SROs, the Government publications or notifications shall prevail. Moreover, as per Section 345(2) of the Income Tax Act 2023, if there is a conflict between the English and Bengali text, the Bengali text shall prevail.