Head on income

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When renting out a hotel as a going concern, including the building, AC, furniture, and utensils, you need to decide how to classify the income. While House Property or Income from Other Sources are options, classifying it as Business Income is generally recommended. This allows for claiming both depreciation and interest on capital, provided the rental agreement supports this classification.

VIPIN GUPTA

VIPIN GUPTA (Querist)
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22 January 2020 We are at present running a hotel and registered under GST. Now we want to rent the hotel as a going concern i.e builidng AC Furniture utensils .i.e. all business facility. In which head to consider its income. If we consider it in House propety will we be allowed Interest on Capital and Depreciation. If we include it in Income from other Souce. We will be allowed depreciation and not interest on capital. Can we take it under the head Business income by including some points in the rent agreement.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 January 2020 Yes take it under business income and claim interest and depreciation it's allowed. It's a commercial property income earned will be business income.