Renting of cabins to doctors

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Tanvi Vora

Tanvi Vora (Querist)
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20 September 2014 Rent received on cabins given to doctors on rent in a hospital to be taxed under which head

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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28 September 2014 Taxable as Business Income....

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Tanvi Vora

Tanvi Vora (Querist)
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29 September 2014 Sir why would it not be charged under Income from House Property

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2025 Good question! Here’s why rent from cabins given to doctors in a hospital is usually treated as Business Income rather than Income from House Property:

Key points:
Nature of letting:

When you rent out regular residential or commercial property, rent is taxed under Income from House Property.

But if the property is let out as part of your business operation (like cabins in a hospital given to doctors to use for their practice), it is more of a business activity than a simple lease.

Facilities and Services provided:

Usually, hospitals provide additional services along with cabins—such as reception, maintenance, utilities, etc.

This makes the transaction a business activity (providing facility/service), not a mere renting of property.

Legal precedent and practice:

Courts and tax authorities have ruled that rent received from letting cabins in hospitals or similar setups (like shops in malls, etc.) where services/facilities are provided, is treated as business income.

This is because it involves operational control, service, and commercial activity.

So:
Situation Tax Head
Renting out standalone residential/commercial property Income from House Property
Renting cabins to doctors as part of hospital business Business Income

If you only lease cabins without providing any additional services or facilities, then it might be considered Income from House Property. But in most hospital setups, it is business income.

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