I am in the process of engaging a tenant to rent my current home as my family will be occupying our new home. For your information I am already registered as a salary and wage earner. Will I be taxed on the rental income I will be receiving?
Yes, you will be taxed on the rental income that you will receive. You will need to change your registration type with FRCA from salary & wage earner to business since you are deriving rental income and you will be taxed on the combined income.
You will continue to use the same Tax Identification Number (TIN) and would need to declare your annual gross rental income together with your salary income in your business return. You will be allowed to claim as a deduction for expenses (e.g. rates, rent paid in respect of lease, repairs & maintenance of property, other expenses.) incurred for the purpose of deriving your rental income.
Tax will be calculated on your Chargeable Income (Chargeable Income = Gross Income less Deductible Expenses claimable under Income Tax Act.
Can the employment income derived by an employee in a tax year be reduced by any business loss when calculating chargeable income?
No, effective from 1st January, 2013 any business loss cannot be offset against your employment income.
Print This Page