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Income head for a bike rental side income

30 August 2016

I am a regular salaried employee.However I have invested a couple of bikes and use them for rental through a bike rental company X. I am not a part of the company X. I have just given the bikes to them to rent out. The bikes are in the name of the company but we have an agreement stating that I am the owner of the bikes and I have leased the bikes to them. In this case under which head would this income go ? Income from other sources or income from business ? Can I claim depreciation on the bikes ? If my net income is negative from this, can I set it off against my regular salary ? And do I need a firm to claim depreciation ?

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4 Replies

manju (student) (39 Points)
Replied 30 August 2016

Though you are not the registered owner, you are the beneficial owner. If you are earning any income from this business, you are supposed to include this source while filing Income tax return. In case of loss from business, you cannot setoff with salary income.

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Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 30 August 2016

INCOME HEAD : INCOME FROM OTHER SOURICES

CAN NOT CLAIM DEPT OF BIKE

THANKS

Kishan Vasantrai Kavadia (Article Assistant) (46 Points)
Replied 30 August 2016

No Depreciation Benefit, being a beneficial Owner You can Show the Rental Income in Income From Other Sources.

You can not reduce your tax on Salary by setting of loss from business or other sources,

Shiwali Shukla (Article) (33 Points)
Replied 30 August 2016

Beneficial ownership is relevant to claim depreciation.You are the lessor of the bikes though the bikes were registered in the name of the company X, you can claim depreciation on these bikes (Refer the Supreme Court judgement in I.C.D.S Ltd. case).You can show it as a business income and claim depreciation on these bikes.But you cannot set off the loss of business with the income of salary.