02 September 2009
We are having commercial premises. part of premises has been leased out and balance is still vacant.should we take notional income of vacant premises for tax computation purposes. what would be the treatment o interest cost which is incurred for entire premises.if only actual rent is considered as income than whther whole interest cost would be allowed as deduction or only interest cost of rental property will be allowed as deduction
02 September 2009
the same property will be classified as business asset & rental income will be part of business income. There is no need to have the details of notional rental income. Account for actual rent received & claim the 100% interest benefit as business expenditure.
02 September 2009
Income from commercial complexes - Even in the case of commercial complexes, mere letting out the property and deriving income should be assessed only under the head ‘Income from house properÂty’ and not under ‘Income from business’. However, where the lease agreements provided that certain independent services are also covered apart from the letting of premises and a composite rent is received, the authorities should bifurcate the receipts into portion thereof which is attributable to the provision of such services and assess them under ‘Income from business’ or ‘Income from other sources’. The remaining portion will be taxaÂble under ‘Income from house property’ - A.R. Complex v. ITO [2008] 167 Taxman 46 (Mad.).
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