Depreciation of let out residential property

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This discussion explores whether an individual can claim depreciation on residential properties that are let out. The consensus is that depreciation is generally claimable only when a building is used for business purposes. The specific treatment of the property as a fixed asset in a business balance sheet and whether rental income is treated as business or house property income can affect eligibility.

Rajesh

Rajesh (Querist)
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11 January 2022 1) Assessee is an resident individual
2) He has 2 businesses and 1 profession, income from which is offered as Income from Business / Profession
3) He owns 4 residential houses
4) 3 houses are let out; either for full or part of the year
5) 4th hosue is self-occupied
6) All 4 houses are shown as Fixed Assets in Balance Sheet
7) Rent from let out houses is offered as Income from House Property

Query:
a) Can assesse claim depreciation in P&L account of Business / Profession?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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11 January 2022 No. Not eligible...

CA Puja Sharma

CA Puja Sharma (Expert)
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11 January 2022 Deprecation can be claimed only when you are using the building for business purposes.
So please check if you have recorded the assets under the business balance sheets.

Rajesh

Rajesh (Querist)
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11 January 2022 Thank You for your reply!

Rajesh

Rajesh (Querist)
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11 January 2022 4 houses are shown as fixed assets in the balance sheet of a proprietorship firm through which profession of CS is carried out. Same firm raises rental bills (with GST) on tenants for commercial use of 2 residential houses. For 3rd house renal bills are not raised as it is let out purely for residential purpose. 4th house is self-occupied. Will that change depreciation effect?

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