Regarding income tax calculation on commercial property


(Querist)
22 May 2019
Firm is registered under LLP for real estate business. The LLP has purchased commercial office and taken loan in the property. details with queries are given below.

Sr.No. Particulars Amounts
1 Purchase Property Cost 6 Crore
2 Taken Loan 3 Crore
3 Own Investment 3 Crore

Annually Income & Expenses
A Above Property Given on rent 5 Lakhs – Annually Rs. 60 Lakhs
B Interest on property loan 4 Lakhs and will be reduce monthly by reducing method

Assumption on annual basis for income tax
A Rent Income 60 Lakhs
B Interest 42 Lakhs
C Profit 18 Lakhs

Questions
1. Can company claim interest amount from Income Tax?
2. How many years company get benefits?
3. If next year company will purchase 2nd property on loan then can they claim interest of 2nd property from income from 1st property?


CA R SEETHARAMAN (Expert)


Click to Talk 23 May 2019
1 Yes interest payment can be claimed as business expenses.
2 No limitation being business expenses.
3 Yes it can be claimed as it related to business.
Claim depreciation on building in addition to interest.


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