Notional rent

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This query is : Resolved

HIMANSHU (Querist)

07 May 2019 `A’ has constructed an office building (on a self owned Plot) comprising of Ground + 5 floors. `A’ has shown the said Land & Building as Fixed Asset in his Balance Sheet. The said presentation has been accepted by the Income Tax Department. At present `A’ is using the entire Building for his Office purpose for himself, his sister concerns and for the Ltd. Companies in which he is a Director. `A’ now wishes to give a part of his Fixed Asset on Leave and License basis. The said Building has not received an Occupation Certificate from The Municipal Corporation of Greater Mumbai.Queries:

1. Will the said income generated be treated by the Income Tax Department under the head of Business Income or Income from House property?

2. Will the rest of the Fixed Asset be charged Notional Rent by the Income Tax Department in view of the letting out of the part of the Fixed Asset.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 May 2019 1 It will be treated as business income as it's a commercial building.
2 No notional rent for his office purpose for himself. Charge actual rent for sister concern and limited company to avoid notional rent.

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