Renting of Furniture, Plant and Machinery

Others 1514 views 3 replies

Naveen

student

334 Points Posted on 02 April 2021

Hii guys

I m a salaried Employee. In Aug 2020 I purchased 70k worth of Furniture (household sofas, tables, chairs etc) and I started renting it to a family for 2k per month from Dec 2020. And I spent 12k for some repairs of that furniture in Feb 2020

Now Since it is not my main line of business, I understand that I can offer that income under Income from other sources. Plse confirm whether my contention is correct..?

And further I read that as per Sec 57, I can claim the expenses which I incurred to earn that furniture rental income. Now how much expenses can I claim..

1. Full 70k + 12k repairs (or)
2. 10% Depreciation on 70k + 12k repairs (or)
3. Nothing at all

If yes and if I can go with option 2, I will get loss of 11k i.e {(7k - 10% of 70k + 12k) minus 8k (2k x 4 months)}.

Is that ok...?

Replies (3)

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 02 April 2021

Yes the income should be under Income from other sources.

Expenses (not capital expenses) such as repairs, insurance premium, and depreciation in respect of plant, machinery, furniture and buildings are deductible from rental income earned by letting out of plant, machinery, furniture and building. The rental income from the plant and machinery is chargeable to tax under income from other sources. The expenses incurred in respect of such plant and machinery are allowed to be deducted.

So, only 12000 rupees will be deducted