Taxes on house exchange (house property or business income?)

My old retired parents (who draw pension) are planning to rent out their primary residence and move to another location in another town where they will pay a lower rent. They are interested in generating some extra income. What are the tax implications of these? Would the rent received be Income from House Property - in which case they will not be able to claim the rent paid out as an expense? Or should they recognize it as Income from Business in which case they can claim the rent paid at the other location, as an expense? The first one will result in a higher tax liability. Any opinions