Income from house property

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This query is : Resolved

HIMANSHU (Querist)

17 September 2012 We are a registered Partnership firm carrying on business of real estate development . Couple of years ago we had constructed a residential building in which we have retained 4 residential flats, out of which 3 flats were/are given on leave and license basis. The 4th flat is used by the partners for personal use and is shown vacant in our Balance Sheet. We have shown the flats as Fixed Assets in our Balance Sheet and claiming Depreciation on all the 4 flats. The Income Tax Department is assessing our rental income under the head Income from Business & Profession. We wish to know whether Income Tax Department can calculate notional rent (Annual Value) on the 4th flat which is not given on rent. Kindly advice

CA Ayush Agarwal

CA Ayush Agarwal (Expert)

17 September 2012 Notional Rent Concept in HP Chapter of Income Tax Act.

Not in case of Business Profession Head.

In Case of HP, Since You are Showing Three Flates on Rent, Then Fourth Flat Can not be Taken as Notional Rent.
If More Than One Flat Showing Vacate, Then Can Take Notional Rent, But This Applies in Case of HP Head Only, Not in Case of Business profession.

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