Residential house rent of partner

This query is : Resolved

PANKAJ KUMAR SRIVASTAVA (Querist)
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24 April 2018 RESPECTED SIR,
THERE ARE 4 PARTNERS IN A PARTNERSHIP FIRM. THE FIRM HAS MADE AN AGREEMENT FOR RESIDENTIAL HOUSE OF ONE OF IT'S PARTNER.
CAN THE FIRM DEBIT THE AMOUNT OF HOUSE RENT IN IT'S PROFIT AND LOSS ACCOUNT ? WILL IT BE ALLOWED AS A DEDUCTION BY THE INCOME TAX DEPARTMENT ?
PLEASE GUIDE ME

Shrinivas (CA, LLB, CISA)

Shrinivas (CA, LLB, CISA) (Expert)
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24 April 2018 Yes, the amount paid as rent to a partner for using his house for the business, as a part of the agreement, will be allowed as a deduction in the hands of the firm.

The amount paid must not be unreasonable and excessive so as to attract disallowance under Section 40A(2).

RAJA P M

RAJA P M (Expert)
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24 April 2018 Yes... The Firm take the Residential house on Rental basis then the Firm will give rent to the Partner also account it in Rent Paid head in the books of accounts... It's acceptable under income Tax...

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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25 April 2018 Whatever rent paid in the firm name, If TDS applicable u/s 194I same to be deducted in order to claim rent as expenses.

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