assesse is individual engaged in gym business and have bought machinery costing 30lacs by borrowing funds from its other firms as unsecured loans on a rented property. what is the treatment if he wants to sublet gym and fix his income from third party and how can he claim benefits of depreciation and under which head income will be chargeable to tax?
whether it will be considered as business income or rental income or operating lease please suggest
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Treatment of income under the head
Replies (2)
It will be rental business income, depreciation may be claimed by either of both
Yes, It will be rental business income in the hands of the assessee. However, Assessee is not able able to claim depreciation on that machinery. Because, the asset should be actually used for the purpose of business or profession of the assessee. If the assets are not used exclusively for the business of the assessee but for other purposes as well, depreciation allowable would be proportionate to the use of business purpose.
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