PARTNERSHIP FIRM TAXATION

As the shop has been rented, it constitutes income from house property and not business income. So you can avail of Std deduction of 30% and interest on loan taken for purchase of house. There is no other deduction which is permissible in act.

yes there is very little scope for tax planning because of the following reasons

a) its a partnership

b) it has only rental income.

if they can change into HUF than there will be tax saving of basic exemption limit and also from tax slabs.
 

i think the Firm give the shop to a middle man on less rent  who should be relative having less income. than the middle man sublet the shop to previous tenent. so when the assessement will done firm will pay less tax.

Originally posted by : PiyushAgrawal
	Originally posted by :ARVIND JAIN "  A REGISTERED FIRM HAS MOTHER AND SON AS PARTNER .A SHOP IS BOUGHT IN FIRM NAME IN 1987.THE FIRM DO NOT HAVE ANY BUSINESS INCOME AND HAS GIVEN SHOP ON RENT FOR 600000 PER YEAR AND EARNS INTEREST ON 3 LAC DEPOSIT @ 9 % P.A.ANY SUGGESTION FOR TAX PLANNING TO SAVE TAX OF 30% ON RENTAL INCOME AFTER DEDUCTIONS AND INTEREST INCOME.SUGGEST. " if they can change into HUF than there will be tax saving of basic exemption limit and also from tax slabs.     i think the Firm give the shop to a middle man on less rent  who should be relative having less income. than the middle man sublet the shop to previous tenent. so when the assessement will done firm will pay less tax.

Well, thats a nice flip, but you have to be careful that you are not charging less than the "expected rent" from your relative. [ Expected rent here refers not to what you are expecting but as defined u/s 27 of IT Act.