Arka Bose (None) (313 Points)
21 October 2009Hi,
If I rent my flat to my staff who works in my (sole proprietorship) business,will that be taxable u/h Profits and Gains from Business or Profession?Also whether actual expenses like municipal tax on that same flat be allowed to be deducted?
thanks in advance
Arka
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 21 October 2009
ARKA
This is your rental income ie. Income from House Property .................& actual expenses like municipal tax will be allowed in computing the income .................
Arka Bose
(None)
(313 Points)
Replied 21 October 2009
| Originally posted by :Sorabh Gupta | ||
| " | ARKA This is your rental income ie. Income from House Property .................& actual expenses like municipal tax will be allowed in computing the income ................. |
" |
Hmm so you mean that the expenses that i will incur will be deducted u/h of Profits and gains of Business or Profession but the income itself is not?
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 21 October 2009
I think thr properety which you rented is your own property & which has no link with your business..........is it ??????????
ashish gupta
( student)
(1922 Points)
Replied 21 October 2009
The income will bw rental income and u will get the deduction of municipal tax paid and 30% of the balance as standard deduction under the head income from house property.
Arka Bose
(None)
(313 Points)
Replied 21 October 2009
| Originally posted by :Sorabh Gupta | ||
| " | I think thr properety which you rented is your own property & which has no link with your business..........is it ?????????? | " |
Well,only link is that my staff rent that property and I get paid for that.
https://personal.vsnl.com/arunhomepage/business.htm#guesthouse
In the above link it says that in case of a guest house,i get deductions for any expenses on that.So why not on my property where my staff or employees live?
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 21 October 2009
Arka
Guest house is purely the property of business & purely use for the business . And your house property is not theproperty of business & might be not use purely for business ......So its income must be taxable under head House Property not under business & professsion........
Arka Bose
(None)
(313 Points)
Replied 21 October 2009
Are staff quarters properties of business?(sorry i am too noob in this)
you see,i thought giving rent to my staff ,i thought it became a staff quarter.
Deeps
(Article Assisstant)
(2485 Points)
Replied 21 October 2009
The assessee is not letting out the building property for the sake of letting out or for the sake of earning income. The property is let out in order to enable the carrying on of the assessee's business in a better and efficient manner. The act of letting out is quite incidental to the carrying on of assessee's business. Therefore, income is incidental to the business activity carried and assessable u/s 28 of Business Income. THerefore actual expenses towards repairs and depreciation are allowable.
* CIT Vs. National Newsprint and Paper Mills Ltd.
* ACIT Vs. Hindustan Machine tools Ltd.
* CIT Vs. Admiralty Flats Model
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 21 October 2009
If any building is purely use for the business then it is the assests of bussiness & you can clim depreciation for that property...............As ou tols Staff quarter is property of business & it will be capiralised under head Buiding & company can claim depreciation for such building.....................
on the other hand , it will be treat as a perquisites for employees .............& inculde in their taxable income....................
Arka Bose
(None)
(313 Points)
Replied 21 October 2009
| Originally posted by :Sorabh Gupta | ||
| " |
If any building is purely use for the business then it is the assests of bussiness & you can clim depreciation for that property...............As ou tols Staff quarter is property of business & it will be capiralised under head Buiding & company can claim depreciation for such building..................... |
|
I know that it is taxable as perquisites under their salary,
actually here was my problem.
In a profit and loss account,they have credited the Rent from Staff quarters and Debited the municipal tax for the staff quarters
so the problem is that whether they are to be allowed to get the proper profit required as per IT rules
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 21 October 2009
Arka
You confused me, tell me one thing that , whether thr propety is Staff Qaurters OR
Is It your flat.............
Arka Bose
(None)
(313 Points)
Replied 21 October 2009
Sorry about that,
I need both,as in this case,its the staff quarter
But i also want to know what will happen if I give rent to my staff in my own property(suppose at a concessional rate) will that be a perquisite to the staff?Will the income and expenses be assesed under that business?
As in this case,it is the staff quarters.
But i would like to know about both.
And sorry again for confusing
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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