44ad on hotel
Anjali Jain (148 Points)
16 May 2018
is 44AD applies on hotel and resort business?????
8 Replies
CA Sunil Kumar
(Chartered Accountant)
(4524 Points)
Replied 16 May 2018
If total income does not exceeds 2 crore, then you are eligible for section 44AD. But this section applicable only to Individual, HUF, Resident partnership firm. In the following case, section 44AD cannot be applied.
1) persons covered in section 44AE
2) Professional Income
3) commission or brokerage
4) agency business
5) Insurance agent
1) persons covered in section 44AE
2) Professional Income
3) commission or brokerage
4) agency business
5) Insurance agent
Rajaya
(sdfs)
(22 Points)
Replied 21 March 2019
I read in the review that it also depends on hotel https://planetofhotels.com/en/india Not all hotels comes under this rule.
Suja Krishnan
(9 Points)
Replied 27 July 2019
What is the definition of hotel business in Income Tax Act
Suja Krishnan
(9 Points)
Replied 27 July 2019
I am running a hotel business in my own building.I do have another building which I let out with rental agreement.Are the two incomes come under House property.Even if i am collecting revenue from the hotel ...somehow the word termed as rent for layman in hotel...Can I avail the income from the hotel business in 44AD?And if so..can anyone refer any previous Cases to do so...pls
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 27 July 2019
1. Though renting out a building looks very complex from a tax angle. The important question is whether the same would be chargeable to tax under the head IHP or PGBP..?
2. In case of an income to be charged under the head IHP, there must be a rental receipt from periodical basis from the tenant. This rental income will only be subject to the portion of your building let out only for the purpose of rent. There will be a rental agreement with respect to the above income and consequently, it will be for a longer period (say 11 months).
3. Whereas in case of business income above features will not be present, there will be bill raised on per day basis or for a month in some cases, and besides renting out the building other amenities will also be provided by the owner. Even if no formal Memorandum of Association (like for company) is present the same will be charged to tax under the head PGBP and it can never be charged to tax under IHP.
4. You may be having a building but there will be the difference when you let it out for lodging purpose and when u let it out for the residential purpose. These differences should be given due consideration while segregating your income.
5. With respect to income from Hotel business, sec 44AD can be availed on the same.
Please correct me if the above interpretation has an alternative view.
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