Hi... we have an open plot of land that we are leasing to a corporate.... for Rs. 1,50,000 a month (one lakh, fifty thousand)
The plot is owned equally by me and my mother, and handling / maintainance of the same will be handled by our partnership firm. As of now, for the coming year neither me nor my mother have any other income in our names, although both have IT files.... and have filed returns upto last year.
We have requested the corporate to pay the partnership firm rental as well, in addition to paying me and my mother.
The partnership firm already has a rental income of Rs. 4,50,000 a year (4 lakh fifty thousand). I have been told that if the rental income crosses Rs. 10,00,000 a year, the partnership firm will be in the service tax bracket, and that even later, we will have to be in the service tax bracket for the same, whether or not we continue the lease with the above mentioned corporate.
Could anyone suggest the best possible breakup to request the corporate to pay the three entities - i.e., my mother, myself and our partnership firm, considering that we CAN also claim certain expenses by the partnership firm, that me and my mother cannot, i.e. car depriciation, telephone expenses, driver's salary, staff salaries, etc. Also to be considered is that, if in our best interest, we would want to avoid bringing the partnership firm in purview of the service tax slab, i.e. income of more than Rs. 10,00,000 (Ten Lakhs) per annum, because that means that every year in the future, even if it's rental income is Rs. 1,00,000 (One Lakh) per annum, we would still be required to pay service tax on the same :(
Would appreciate it if anyone can revert withthe best possible breakup... thanks! :)
CAclubindia
