LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Q'n on house property

CA Dheeraj S (Practicing CA) (427 Points)

21 January 2012

I got a doubt,

flat let out by an owner cum employer to his own employee is considered to be Income from house property or not?

Please answer your views with reason...no other information is provided in the question.

Can you help me?

Reply
Follow
Share

16 Replies

CA SUMANTH (LEARNER.....) (294 Points)
Replied 21 January 2012

Its income from House property.

suchit shah (Dy. Manager(Finance & Accounts)) (208 Points)
Replied 21 January 2012

It will be taxable under the head business and profession.... it s very rare that the let out of house property will not be consider as the income under the head house property... this case is one of them......

1 Like

CA Dheeraj S (Practicing CA) (427 Points)
Replied 21 January 2012

Originally posted by : suchit shah
	It will be taxable under the head business and profession.... it s very rare that the let out of house property will not be consider as the income under the head house property... this case is one of them......

I found the same answer, That the property is now a business property and income arising there in is "profits and gains from business". But what's the logic or a reason behind it?

CA Dheeraj S (Practicing CA) (427 Points)
Replied 21 January 2012

Originally posted by : suchit shah
	It will be taxable under the head business and profession.... it s very rare that the let out of house property will not be consider as the income under the head house property... this case is one of them...... I found the same answer, That the property is now a business property and income arising there in is "profits and gains from business". But what's the logic or a reason behind it?

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 21 January 2012

its a house property income

santhosh kumar (article student) (84 Points)
Replied 21 January 2012

The income shall be definitely taxable under "houseproperty".question is clear that owner(cum employer) lets out the property to tenant(employee) and it is clear that there is income on that letout.so that definitely taxable under head houseproperty

nimish solanki (IPCC CLEARED) (108 Points)
Replied 22 January 2012

The employer is letting out Flat which is not his business premises. So , income will be IHP regardless of the fact that landlord-tenant are Brother-sister , or employer-employee.

Khushboo Somani (Business) (90 Points)
Replied 22 January 2012

If letting out of flat is considered as incidental to his business, the income from such property is not taxable under this head, because the property in this case is considered to be used by the owner for his own business and, therefore, be taxed as business income.

*RENU SINGH * (✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ ) (21627 Points)
Replied 22 January 2012

if the house is given to employee so that he can reach ofc ...means for the benefit of business. Then it will be considered as business income.

Otherwise if will be considered as house property.

Aravind.. (CA) (1262 Points)
Replied 22 January 2012

What has to be taken into account in this case is, why did the employer provide that house to his employee? Has he been into such arrangement only to that employee or not?

If the questions to the above are in such a way that it is for benefit of his business, it has to be taxed under the head profits and gains from business/profession or else income from house property.

CA Rakesh Soni (chartered accountant) (24 Points)
Replied 22 January 2012

It will be taxable under the head business and profession because property is used for business purposes..

CA Dheeraj S (Practicing CA) (427 Points)
Replied 23 January 2012

Thanks for all the answers and views....

leeladhar (apprentice) (261 Points)
Replied 23 January 2012

If the purpose of letting out of house for the employee is for the benefit of the business then it is taxable under head 'Business or Profession' , otherwise it is taxable as 'Income from house Property'