I think it is allowable but the head income from house property doesn't allows any expenditure except municiple taxes,30% standered deduction and Interest on housing loan. So doesn't allow remunaration to partners and interest on partner's capital but according to the section 24(b) interest on partner's capital may deductable. So better to consider such income from business source and then claim such expenditures.

 

OM SAI SRI SAI JAI JAI SAI

treating the rental income as business inc might create problems for you in future. I would advise that let the rent remain under the head of house property. Claim remuneration and interest on capital as business exp. You can claim a max of 150000/- remuneration as per Income tax act. You shall get a business loss which can be setoff aginst the Income from House property.

I think this would be the most beneficial way. Hope this helps.

pls note that you canot get any deduction of business exp under the head of Inc from House Property.

Dear Chetanji : Rental income of Immovable Property is taxable under House Property. Under House Property assessee can claim three types of deductions. 1.) Municipal Tax Paid 2.) 30% - Standard Deduction 3.) Int. on borrowed Capital (Outside borrowings as loan) So in your case you can not claim int. paid on partners'capital as deduction under house property. Now as far as Remuneration to partner is concerned you can claim such exp. as deduction only if you have any business activity. Even when we compute Book profit for the calculation of Remuneration we add all other incomes to arrive at PURE BOOK PROFIT earned from BUSINESS ACTIVITY. Limit of Rs. 150000 is applied when there is a LOSS & business will suffer loss only when there is a business activity. Hence in short You are not be able to claim Int. on partners'capital & remuneration as deduction. You have to pay tax @ 30.9% on the amount of Rent - M.Taxes - Std. deduction.

 .......thank you sir for help......please tell me if firm have some business income also then can we credit rent income to profit & loss & claim remuneration and interest on capital as expenses ?

Dear Chetanji
I have made one small mistake. 
"Even when we compute Book profit for the calculation of Remuneration we add all other incomes to arrive at PURE BOOK PROFIT earned from BUSINESS ACTIVITY. " Instead addition it is to be deducted.

Now You can claim Remuneration & Interest on Capital agaunst ONLY BUSINESS INCOME to the following extent.

Remuneration :

If Profit is upto 300000 - 90% of Profit
If Profit is beyond 300000 then
    On First 300000 - 90% of Profit
           On Balance - 60%

Int. on Capital - Max. is 12% pa. ( pls check ur deed )