Joint property fully paid by husband but occupied by wife for her business

mg23 (eng) (30 Points)

17 June 2019  
Hello Experts, I am a salaried employee and in process of owning a commercial property - I being first owner and my wife second owner. The property will be purchased completely from my funds (My wife is co-applicant in loan but it will be serviced by me completely). I am adding her co-owner just for social reasons. I file ITR2. I already own my self occupied house (single owner). I fall in 30% income category currently. My wife would be running her own business at the said premises (profession). She files ITR4 (presumptive). She falls in 5% income category currently. I have following questions 1. Is she allowed to pay rent to me? Is she allowed to claim it as a business expense (presumptive)? 2. Can I show rent paid by her in my income tax return completely under "Income from House Property"? Am i allowed to claim deduction for interest paid under "Income from House Property"? Which ITR form i should be filing - ITR2? In my income tax return, the said commercial property would be shown as "Let out"? My goal is not to save tax but to follow the correct practice. I would appreciate if Experts on this forum can enlighten me with the correct thing to do. -Thanks