Rental income from factory land & building only

This query is : Resolved

Talada Venkat Rao (Querist)
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03 August 2011 I would like to know if the Partnership Firm is having a Factory Land & Building and given to another Firm and getting Rental Income after TDS.

The Income Tax is payable on ;

[1] Income From house property
Less : Municipal Tax & 30%
(Without Depreciation & Int. on Capital)
or
[2] Income from Rent
After Depreciation & Int. on Capital

Please give us your valuable advice in this regard.

Regards
Venkat Rao

rajiv

rajiv (Expert)
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03 August 2011 DEAR VENKAT,
FOR INCOME FROM HOUSE PROPERTY, THERE IS A SEPARATE HEAD FOR INCOME TAX PURPOSES I.E. INCOME UNDER THE HEAD HOUSE PROPERTY. IN YOUR CASE, THE RENTAL INCOME FROM FACTORY LAND AND BUILDING WILL BE TAXABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. DEDUCTIONS AS ELIGIBLE U/S 24 SHALL ONLY BE ALLOWED LIKE 30% AND INTEREST ON LOAN TAKEN FOR THAT BUILIDNG.INTEREST ON CAPITAL SHALL NOT BE ALLOWED.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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03 August 2011 As per section 22 building includes factory also

you need to show the income from house property and need to calculate

1] Income From house property
Less : Municipal Tax & 30%
(Without Depreciation & Int. on Capital)

Interest on loan can be claimed

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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04 August 2011 If you have leased out Factory Building with the Plant and Machinery it can be treated as a business of leasing. Accordingly you can claim all expenses and depreciation from the leasing business as business expenses and the income can be shown as business income.

Talada Venkat Rao

Talada Venkat Rao (Querist)
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16 September 2011 Thank you for your valuable advice.

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