Person A rents office space to his own Proprietory Firm B & collects rent every month from B.
What impact does this have on the income tax return of A?
7 Replies
Saurabh Maheshwari
(B.com,ACA)
(5923 Points)
Replied 08 July 2013
NO IMPACT.......because in his ROI rent is his income in personal capacity but exps. in proprietor capacity...so both will get offset....
Akshata
(CA Final )
(324 Points)
Replied 08 July 2013
His profit will reduceby claiming the rent expense..and income can be shown in House property against which he avail take Interest deduction,
Saurabh Maheshwari
(B.com,ACA)
(5923 Points)
Replied 08 July 2013
| Originally posted by : Akshata | ||
 |
His profit will reduceby claiming the rent expense..and income can be shown in House property against which he avail take Interest deduction, |
 |
yes,agreed............
Sunder
(Business)
(165 Points)
Replied 09 July 2013
| Originally posted by : Akshata | ||
|
|
His profit will reduceby claiming the rent expense..and income can be shown in House property against which he avail take Interest deduction, |
|
What is the way for A to claim Interest deduction? An illustration will help with reference to ITR4.
Akshata
(CA Final )
(324 Points)
Replied 09 July 2013
hi sunder
he can avail deduction of interest on loan taken (if any) irt house property
say, 30000 is being paid as rent p.m. then
Gross Annual Value (not considering municipal value/fair rent/std rent) for whole year = Rs. 360000.
Less : municipal tax (if paid by him,say) = Rs. 10000
Net Annual Value = Rs. 350000
Less : Deduction u/s 24
a) 30 % = Rs. 105000
b) Interest = Any Amount
Thus, Net Income from House Property = (350000-30%-Interest)
Similary he can claim Rs. 360000 as business deduction.
Hope this was clear.
Mihir
(Wealth Manager)
(5293 Points)
Replied 10 July 2013
I guess one needs to enter into a leave license agreement in order to rent a premises to someone. How does one prepare a rent agreement when the both the parties are one and the same person?
TDS is to be deducted from rent paid. How does one account for the TDS when the rent giver and rent receiver is the same?
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