Rental income from commercial premises

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This query is : Resolved

Shweta satam (Querist)

02 September 2009 We are having commercial premises. part of premises has been leased out and balance is still vacant.should we take notional income of vacant premises for tax computation purposes. what would be the treatment o interest cost which is incurred for entire premises.if only actual rent is considered as income than whther whole interest cost would be allowed as deduction or only interest cost of rental property will be allowed as deduction

chetan soni

chetan soni (Expert)

02 September 2009 the same property will be classified as business asset & rental income will be part of business income. There is no need to have the details of notional rental income. Account for actual rent received & claim the 100% interest benefit as business expenditure.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

02 September 2009 Income from commercial complexes - Even in the case of commercial complexes, mere letting out the property and deriving income should be assessed only under the head â€˜Income from house properÂtyâ€™ and not under â€˜Income from businessâ€™. However, where the lease agreements provided that certain independent services are also covered apart from the letting of premises and a composite rent is received, the authorities should bifurcate the receipts into portion thereof which is attributable to the provision of such services and assess them under â€˜Income from businessâ€™ or â€˜Income from other sourcesâ€™. The remaining portion will be taxaÂble under â€˜Income from house propertyâ€™ - A.R. Complex v. ITO [2008] 167 Taxman 46 (Mad.).

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