Bungalow : whether depreciable or non-depreciable asset
This query is : Resolved
Quick Summary
29 September 2021
Dear All,
I have following query:
Mr. A gifted 1.50 Crore to his younger son Mr B, aged 25 years, to start the business. From this sum, Mr B purchased a bungalow. He has started his business of renting this bungalow to prospective clients.
1) Will this bungalow be treated as depreciable asset or non-depreciable asset?
2) If this bungalow is treated as depreciable asset, then the depreciation rate would be 10%. i.e. Rs. 15 lakhs depreciation. However, he is expecting total rental of Rs. 10-11 lakhs p.a. After all expenses, he will be in loss. Will he be liable to tax audit due to loss?
Kindly guide me.
Regards,
Suraj
I have following query:
Mr. A gifted 1.50 Crore to his younger son Mr B, aged 25 years, to start the business. From this sum, Mr B purchased a bungalow. He has started his business of renting this bungalow to prospective clients.
1) Will this bungalow be treated as depreciable asset or non-depreciable asset?
2) If this bungalow is treated as depreciable asset, then the depreciation rate would be 10%. i.e. Rs. 15 lakhs depreciation. However, he is expecting total rental of Rs. 10-11 lakhs p.a. After all expenses, he will be in loss. Will he be liable to tax audit due to loss?
Kindly guide me.
Regards,
Suraj
30 September 2021
1 Bunglow rented out for functions, it will be considered as commercial use and depreciation can be claimed.
2 Tax audit not applicable in such a case.
2 Tax audit not applicable in such a case.
30 September 2021
Thank you Sir for your reply.
Bungalow is rented to tourists visiting that place.
Is it compulsory to claim depreciation if the bungalow is put to commercial use?
What if we do not consider this as business asset, though it is shown in balance sheet, and the depreciation is not claimed?
Kindly guide.
Bungalow is rented to tourists visiting that place.
Is it compulsory to claim depreciation if the bungalow is put to commercial use?
What if we do not consider this as business asset, though it is shown in balance sheet, and the depreciation is not claimed?
Kindly guide.
30 September 2021
In case of commercial use depreciation is compulsory.
Consider it as residential house property no need to claim depreciation.
Consider it as residential house property no need to claim depreciation.
Message likes :
1 times
03 October 2021
You are welcome.......
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Sales of goods of amount Rs97 lakhs to a party
- GST rate and HSN code for sale of racing horses
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
