I have 1 partnership firm of textile business in which only rent income is received and no business is carried out through the year but we have taken loan for this property from which rent is received.
Now, how this Income from rent is taxable and whether the Interest expenses and other miscellaneous expenses is eligible for deduction under PGBP head? i.e. Loss from PGBP is eligible for set off against Rent Income?
and can we distribute this Rent Income to partners in profit sharing ratio?
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Income from Rent only in Partnership Firm
Replies (1)
Rental income from property of firm shall be taxable under house property and interest on loan taken to purchase/construction of this property shall be allowed up to Rs. 2 lacs as per section 24(b).
partners can distribute the net profit from any activity of firm if partnership deed does not restrict.
With effect from the assessment year 2018-19, loss under the head “house property” shall be allowed to be set-off against any other head of income only to the extent of Rs. 2,00,000 for any assessment year.
Hope your doubts are clear.
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