Clubbing of 2 incomes

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A tax consultant filing under Section 44AD is asking if they can continue to do so after receiving commercial rental income. Rental income from commercial property is generally taxed under 'income from house property', not business income, unless it's the primary business activity. The £20 lakh GST registration threshold applies to rental income as it's considered a service.

DIVYESH JAIN

DIVYESH JAIN (Querist)

10 August 2020 Dear Sir,

I am a Tax consultant and used to file my Income tax return U/s. 44AD under individual capacity.

I earn contract income and TDS gets deducted under section 194C which is reflected in my Form 26AS.

From this F.Y. 2020-21, I will be earning a Rent income as well from Commercial property on which TDS will be deducted under Section 194I.

My query is whether I will now be able to file return U/s. 44AD as now I have rent income as well which is considered as business income since it is from commercial property. I will be showing 2 types of Income in my Profit and Loss. Is the 20 lacs turnover limit for GST registration applicable for rent income from commercial property as I am not registered under GST.

Please help me to resolve this matter.

Regards,
Divyesh Jain

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

12 August 2020 Rental income from commercial property will be taxed under the head income from house property. It does not form part of your business income unless it is your main business activity. Rs. 20 Lacs limit will be applicable for GST registration in case of rental income as it constitutes service.

DIVYESH JAIN

DIVYESH JAIN (Querist)

12 August 2020 Ok, Thanks a lot for sharing information.

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