Income from hp
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
23 August 2015
One of our clients own a factory. It has been partially let out. 3/4th of the property is let out and 1/4th is used by the owner for his business.
The owner has been showing rental income in his profit & loss account along with his business income to claim benefit of electricity charges paid.
In my opinion, the correct treatment should be that the rental income should be taxable under the head 'Income from House Property' where he can get 30% standard deduction. And Profit/loss from his business under 'Profit or gains from Business and profession, where the proportionate electricity charges can be claimed as expense.
Kindly help me with this.
Thanks
The owner has been showing rental income in his profit & loss account along with his business income to claim benefit of electricity charges paid.
In my opinion, the correct treatment should be that the rental income should be taxable under the head 'Income from House Property' where he can get 30% standard deduction. And Profit/loss from his business under 'Profit or gains from Business and profession, where the proportionate electricity charges can be claimed as expense.
Kindly help me with this.
Thanks
Amol S Joglekar
(Expert)
23 August 2015
It should be shown as income from house property.
(In some of the Industrial Developement Corporations e.g. MIDC, GIDC, MPIDC etc) sub lease without the permission of such IDCs is not permitted AND that prompts many industrialists to show it as business income rather than income from house property)
While showing under income from house property, the rent is always taken as NET of expenses such as electricity, taxes etc if the same are as per the rant agreement AND then the standard deduction of 30% is given
(In some of the Industrial Developement Corporations e.g. MIDC, GIDC, MPIDC etc) sub lease without the permission of such IDCs is not permitted AND that prompts many industrialists to show it as business income rather than income from house property)
While showing under income from house property, the rent is always taken as NET of expenses such as electricity, taxes etc if the same are as per the rant agreement AND then the standard deduction of 30% is given
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