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Composition scheme for Retail and rent income

20 July 2017

I have propritership shop total turnover 21 lakh.i also have rent income from commercial buildings 25000 per month can I go with composition scheme

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22 Replies

Muthu Kumar (129 Points)
Replied 20 July 2017

not possible.. bcoz service ( rent income ) not included in composition scheme..

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CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 20 July 2017

No you can't opt for composition scheme.

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 20 July 2017

you can't but there are way around- you can transfer your property to your wife or mother or any close relative who is not registered. by doing this you will have two benefit one no gst on rental income and two you can take composition scheme for your regular business.....

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 20 July 2017

As rental income is service you can't opt under Composition Scheme.

Only option is to stop showing rental income or transfer of your business or property.

Avinash Dewan (64 Points)
Replied 20 July 2017

Pls go thru clubbing provisions u/s 64 of the Income Tax Act before you do any planning as suggested above.

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RAJA P M ("Do the Right Thing...!!!") (128029 Points)
Replied 20 July 2017

Dear Sanjay.,
In opinion....
Simply you can justify your Income from Business. Bcoz, Composition scheme is not good for all businesses.
If your proprietor firm sell goods to end users (customer sale) then you can move above said way if it's available.
Then you ll be sell goods to B2B transactions you don't go composition.
Bcoz, Your registered customers not ll be continue the business to you....
SI, you can decide it ones....

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 20 July 2017

@ avinash Dewan....clubbing provision are under income tax act, not gst laws.....there will be no change in his income tax liability whether he transfer his property or not as the property income will be clubbed with his other income....but in gst his gst liability will surely be reduced....

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 20 July 2017

Property transferred only with consideration.

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CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 20 July 2017

@ rashmi.....do you mean if transferred without consideration than clubbing will be applicable in gst???

Sanjay Sanjay (50 Points)
Replied 20 July 2017

thx to all . I am retailer only do b2c sale.actully I am doing hotel logging bussiness can I give my hotel bussiness to my son at lease and my retail business i option composition scheem it's possible or not

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CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 20 July 2017

of you lease him than it will be a provision of service..and you can't opt for composition than.....

Sanjay Sanjay (50 Points)
Replied 21 July 2017

then how I eligible for composition scheem for my retail business

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 21 July 2017

only option is to transfer your property through registration in your son's name. but for that you have to bear the cost of registration....you have to do cost benefit analysis before you do this...

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