Tax audit u/s 44ab

No, its not loophole. Criteria of Income from HP or business profits can also be derived from assessee's main income of source, number of properties held etc. Its always advisable to get audit report in such cases.

As rightly said above, if it is business of properties or not depends on the movement of stock of house properties, frequency of transactions, how has the assessee booked the properties in his books, his main source of income. So, if this qualifies as business then tax audit is to be done.

govt. is smart enough. if person goes to business income then he can claim Many and also fake expenses. so he is required for tax audit after some limit. but if he is going to HP head then only 30% std. deduction and some interest only.

If the person is earNing even ₹10 crore by renting of 100 properties then also his income will be income from house property and not business except that of hotels by renting rooms on days/hours/week/month basis

if the main object of assesee to let out the properties then taxable under PGBP otherwise it would be taxable under House Property and also if a property rented out his unsold property it will also taxable under House Property. And only income under PGBP is required for Tax Audit u/s 44AB not the income under House Property.

In the recent case law M/s. Chennai Properties & Investments Ltd it is clear that the main objective & income from only source should be explained only then it is possible to show under HP

Small correction - only then it is possible for business income

As per Supreme Court ruling in the case of Chennai Properties and Investments Limited, it was held that renting of property is assessable as business income and not income from house property after considering the following:-
1. Object clause in MoA.
2. Disclosure in IT return.
3. Further, classification of income as HP income or business income will depend on facts and circumstances of each case.

So basically you've to see the facts and circumstances to determine whether the activity of renting constitutes business or not. If it's business, then tax audit needs to be done.

I hope this helps.

If the income is from head income from house property then whatever the amount received tax audit is not applicable
As deduction us 24 is fixed and no other deduction allowed so there is no requirement tax audit

I think there is no loop hole as you are declaring more income in hp and you cannot play with the expenses

Hi,

It is advisable to get your book of accounts audited and show the income as bussiness income as it is the bussiness of letting out house.