I have a query which is related to treating warehouse Rental Income as a Business Income instead of income from House Property. Since my Client has made huge capital and revenue expenditure during the previous year and want to claim depreciation and repair & maintenance expenses which is more than the standard deduction of 30% u/s 24. Further till last year he was showing his income under House Property and in current year he want to change the head of income to be offered.
In this regards I want to know whether. 1. Can we show our Rental Income as a Business Income. 2. If yes, than can we claim depreciation on capital expenditure made in the past years. 3. In case of interest on loan taken against property, can we claim the benefit of interest expenses as revenue expenses against business income (In case we switch to PGBP) 4. for loan taken against property can we claim the interest expenses in house property u/s 24.
16 February 2021
1 Yes, show rental income as business income. 2 Yes, depreciation can be claimed. 3 Yes. 4 No, as we have switched to business income.
16 February 2021
@ CA R SEETHARAMAN, Sir, what I have read and understand is that Rental Income should be shown as income from House Property. Now if we claim this as Business Income. so what precautions should be kept in mind before taking this options. i have also read many case study which i found some in favor and some against this option.
CAclubindia
