House property

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Mihir Kothari (Querist)

15 December 2013 If a part of the property is used for business and profession the income from which is chargeable to tax and if remaining part of house property is let out then will the full amount of income will be considered as house property income or how?

Ashok

Ashok (Expert)

15 December 2013 Even if house prop is used for business, the rental income is taxable under income from house property.

C.A. Mayur J. Raiyani

C.A. Mayur J. Raiyani (Expert)

15 December 2013 No. Only let out part is taxable under house property. However if assessee's business is of letting out the property then and only whole income it taxable under hose property

Ashok

Ashok (Expert)

15 December 2013 If its owner occupied property and owner carrying on business then it shall not be considered under house property but under business income. This is a basic criterion under house property charge ability, that it should not be used for own business of the assesses. However there is no specific exclusion for business of renting properties. So if your in business of property dealing, then the unit you occupy for business shall be included in business income while the rest shall be house property income. Can you give the exact facts pls?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

15 December 2013 In my view, The business of letting out of property is
also a business.
.
1. Own Property used for Own Business.
2. The income of such business is chargeable to tax.
Income of such property will not be called
or included as Income From House Property.
.
We may apply a simple logic. Suppose A runs his business from a place which he takes on rent. Rent is a deductible expense.
.
When A carries on his business from his own place, he does not pay any rent.
If Income Tax Act introduces a Fiction -that.... Rental Income of the Property has to be considered in any case- Then the same becomes allowable as a Business Expense. Net Result = (-)30% Standard Deduction on Rental Income, to which the revenue does not like.
.
Hence Income of the protion of the property used for own business is out side the perview of IFHP.
.
Only Income from Let Out Portion will be considered under the head IFHP.
.

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