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Rent on office premises co-owned by director and employee (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
13 June 2012

I have formed a private limited company providing financial consultancy services wherein my parents are the directors of the company.

I shall be employed as a salaried employee in the consultancy firm wherein i shall be availing monthly salary from the company.

The office premises used for the company is in the joint name of my mother and myself. My query is that can i lease the premises on rent to the company and whether can the company pay rent to me?

What will be the tax implication for the same?

Regards.

Narendra

( Expert )
13 June 2012

ofcourse you can letout the property to the company. As company is a seperate legal entity different from its members and shareholders.

Half of the rent will be taxable in your account and the other half in your mothers account( if no specific proportion is mentioned in the deed)

Author : Anonymous

( Author )
02 July 2012

Hi Narendra, thanks for the response. However I have one more question, w.r.t the above query...

The property which is let out although is in my and my mothers joint name, i am one who is paying the entire EMI and I would like to claim the entire interest expense under the head income from house property. Therefore can i show half the rent income in my name and half the rent income in my mothers name?

Regards.