TAXATION OF RENTAL INCOME FROM WAREHOUSE

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 April 2011 WAREHOUSE GIVEN ON RENTAL AS PER REQUIREMENT ON THE BASIS OF NO OF BAGS KEPT IN THE WAREHOUSE. WHAT IS THE TREATMENT OF THE RENTAL INCOME?
IS THE SAID RENTAL INCOME IS A BUSINESS INCOME? AS WE CHARGE THE RENT FOR PER BAG PER MONTH BASIS & FOR NO OF BAGS KEPT IN THE WAREHOUSE.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 April 2011 The rental income is varying and depends on number of bags kept and it is forming the basis of Rental Income.

Logically, the income arises purely due to the use of the premises.

Secondly,
The basis on which it is being calculated, does not changes the nature of income. It still remains Rental Income

Thirdly,
The Fair Rent, Municipal Valuation, and Standard Rent are the criteria which decide the reasonable expected rent (RER).

Whenever Actual Rent is less than RER, for taxation purpose, RER is considered in deciding the gross annual value of the property. Hence, even if actual rent varies, the mechanism of calculation of property income still works. It can not be denied that the income is earned from the house property and as such can be taxed under the head IFHP.

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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16 April 2011 Hi,

Sec 22 the Charging Section will be applicable therefore it shall be taxed under the head " Income from House Property"

Thank you,

Regards
CA. Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

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