Finance Act, 1974

Taxation of rents: restriction in respect of certain rent and interest.

62.—(1) This section applies to—

(a) rent in respect of premises, or

(b) interest on borrowed money employed in the purchase, improvement or repair of premises,

payable by a person who is chargeable to tax in accordance with the provisions of section 81 of the Income Tax Act, 1967 (inserted by the Finance Act, 1969 ), on the profits or gains arising from rent in respect of those premises for a period prior to the date on which the premises are first occupied by a lessee for the purpose of a trade or undertaking or for use as a residence.

(2) No deduction shall be allowed, for the year 1974-75 or any subsequent year of assessment, under subsection (5) of the said section 81 in respect of rent or interest to which this section applies.

(3) Where, for the year 1973-74 or any earlier year of assessment—

(a) a deduction such as is referred to in subsection (2) has been allowed under subsection (5) of the said section 81 and there is a deficiency within the meaning of subsection (4) of the said section 81, or

(b) an amount falls to be treated as a loss under section 89A of the Income Tax Act, 1967 , (inserted by the Finance (Miscellaneous Provisions) Act, 1968 ), by virtue of an interest payment, so much of any such deficiency as is attributable to the allowance of the deduction aforesaid or any such amount treated as a loss or any portion of such amount shall not be carried forward, or set against profits or gains for the year 1974-75 or any subsequent year of assessment under the provisions of section 89 or 310 of the Income Tax Act, 1967 .