Rental income to partnership firm

1.since the principal business of the partnership firm is to  to run an vehicle   service station , the rental income will treated as "income from house property."

2.salary  and interest  u/s 40(b)   will not allowed against this income.

if pricipal business of the  pricipal business of the firm(i.e what the :"purpose" clause of partnership deed defines) is  earning income out of letting commercial plot then it will be treated as business income and  salary &interest will be allowed as deduction  under i.t act

The income shall be treated as income under the head House Property and only standard deduction of 30% shall be allowed. Also Municipal Taxes paid shall be allowed as deduction.

Regards,

Devendra 

Agreed as above

Even if it is the business of the assessee to own and let house properties, the income should be charged under the head House property Only

But here comes one beautiful taxation angle----Here it goes

Firstly you show the income from Property under head House Property, and claim 30% standard deduction and compute resultant figure

Second as you do't have business, but only expenditure towards salries to staff, maintenance etc compute Loss of Business and represent it as business loss under the head Business or Profession

Now, you can set off the Business Loss against House Property Income and your Gross total Income will be after adjusting your expenses only apart from 30% standars deduction 

Same problem come before me. Now my question is weather partnership firm is required to file balance sheet and profit & loss in ITR or only enter house property income and file the return

Mr. Surinder pal singh,

I am not agree with all the above mentioned answers and rent received will not be taxed under the head house property because as you said this is a commercial plot which has been letout so in this case there is no building and land appurtenant there to hence rent received will be taxable either under the haed income from other sources or income from business as the case may be.

Thanx

CA Anubhav Vishnoi

8750089567

I'm agree with  Mr. Anubhav Vishnoi

Section 22. INCOME FROM HOUSE PROPERTY

The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head "Income from house property".

therefore in such a case such rental income is taxable u/h "IOS" and neither the income from business/profession nor incoem from "HP"

I have the same issue

Mr. Anubhav Vishnoi or Mr Ravi Kumar Mahaur, can you provide me case law on the same matter?