Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Commercial lease/rent -how to save income tax?

Krishna (Self) (32 Points)

27 October 2011

I have a commercial property which is inherited from my mother. As per WILL it is mentioned that property is inherited by me in individual capacity.

I want to know if this can be considered as part of my HUF including my spouse & kids.

This will allow me to save paying income tax on the Rent recieved.

Also if not this, any other way of saving tax on commerical property or any way of showing rental income as business & claiming depreciation.

Reply
Follow
Share

1 Replies

Rahul Gupta (Chartered Accountant) (644 Points)
Replied 27 October 2011

As the property is in your Individual Capacity so you can't show it as HUF Property. However you can transfer your property to HUF and in that case the Clubbing provisions will attracted and the rent received is still taxable in your hands only.

Rent received to be shown under the head Business & Profession is only possible if you are doing a business of buying and renting the property on regular basis. which doesn't seems to be appear in your case.

So i think it's better to show in your own capacity and show the income under the head House Property in which you can claim a Standard Deduction @ 30% of the Rent received.