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Rental income of a pvt ltd company

Kumar (CEO) (26 Points)

25 November 2014

PVT Ltd company has 98% of revenue from rent 2% from business consultancy,

The question is how to treat income tax for the company? Expenditures like salaries to directors, travelling expenses and conveyance expenses are admissible as Expenditure or not?

Can the business loss be set off against rental income?

can anyone suggest best methods?

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3 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 25 November 2014

If the primary business of the pvt ltd co is to let out property and earn rental income which is also stated in M&A, then the company may treat the rental income as chargeable to tax under the head business/profession.

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CA Raj Doshi (Practising CA) (8723 Points)
Replied 25 November 2014

Allow all those expenditures which are related to consultancy business. Other expenses to be disallowed. Rental income to be charged under Income from House Property. I disagree with mihir that it can be charged under business/profession. Disallow part of common expenses in a suitable ratio which is justifiable.