13 February 2011
can anyone explain me the applicability of section 22..when property is held as stock in trade...im not able to understand it properly
13 February 2011
Property is held as stock in trade by the owners or builders who are dealing in property. They are engaged in the business of property.
Suppose a builder is having 1 vacant flat, which is kept by him for sale but he do not wish to sell it at current market rates. He let out the property for the time being. Whatever Income will be received from letting out of such property will be taxed under the head of Income from House Property. 30% Standard Deduction will be allowed on such Rentals.
13 February 2011
When a person does business of buying & selling or building & selling properties like residential/commercial buildings, houses/shops & similar,
the properties untill sold will form his stock in trade.
income from sale of such property is BUSINESS INCOME
while any othr income from such property such as rent/lease will be considered as HOUSE PROPERTY INCOME
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