House property used for business purposes

Mr. A and Mrs. A, jointly having a house property and they are doing business in that property individually, they jointly borrowed housing loan and repayment of housing loan was paid by them equally. What is the treatment of interest

payments and principle repayment ?,

[Apart from this Mr. A is having another one house property which is used for residential purposes (self Occupied). Mr. A bought housing loan on this property and claiming Interest and principle(80 C)]

Replies (8)

If the house is used for business purpose then it wont be taxable under house property.... expenses related to building can be claimed u/s 30, depreciation u/s 32.......

Interest on loan can be claimed u/s 36(1)(iii)

Expenses reated to the building and depreciation of the building may be apportioned n the ratio of Area used by Mr. A and Mrs. A and accordingly the said expenses has to be charged in respective business.

in case of 2 question of u depreciation wil be available at the rate of 5%

question.1:

in this case pricipal repayment is allowed as deduction under sec 80 c but interest repayment will not be allowed as deduction

question 2:

in this case interest repayment will be allowed as deduction under income from house property

and pricipal repayment is  allowed as deduction under sec 80 c

in 1st case - interest expeses related to building can be taxable u/s 30,and repayment of principle amount will not be allowed as deduction because according to sec 80c repayment of principle amount is allowed as deduction which is used for purchase or construction of a residential house property. But depretiation at the rate of 5% will be allowed .

in case 2nd- interest expenses will be allowed as deduction in house property and principle amount will also be allowed as deduction U/s 80c.

sorry interest expenses will be allowed as deduction u/s 30

The value of the property shall be included in their own Business Balance Sheets according to the ratio of ownership. The Interest on the Loan shall be claimed as expense in the  ratio of the payment of loan by each individual. (ie. for example Rs. 50000 is the montly instllment which includes Rs. 5000 as Interesrt, then the Interest shall be claimed Rs. 2500 by Mr A and Rs. 2500 Mrs. A and principal payment shall be Rs. 22500 by Mr. A and Rs. 22500 by Mrs. A). Also depreciation u/s 32 can be claimed on the Property.


Regards,

Devendra K

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