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Renting a residential to a private limited company

Tax queries 1116 views 1 replies

Vasudev

Project Manager

32 Points Joined April 2015

Hi,

I own two residential flats, which I would like to rent/lease to a private limited company where my father is a director. Company will use one of the premises for its own office purpose. other one will be used by its employees as quarters (employees will be paying the rent).

1) Is it legal to rent residential flat for office purpose?

2) Since employees could be changing (due to marriage/resignation), is it advisable to have agreement with company itself to deduct the rent and pay me or better to directly have the agreement with employees?

Replies (1)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

There are no legal restrictions as such to let out residential premises to a company. However you need to keep strong documentation such as Lease Deed. Also you would need to make TDS from the rent paid by teh co to you and file TDS returns and provide the TDS Certificates.

In case of your second house whihc u would be renting to employees, you need to make an agreement between you and the employees about settlement of the rent. You can recover the rent from teh security deposit paid by the employee.