Rental Income

Your rental income would be taxed under the head income from house property and you will get 30% standard deduction against that income and so you cant claim any other expense against such income other than house loan.

As far as business income is concerned you can claim expense of all expenses incurred for such business.

You can save tax by investing in LIC, PPF, ELSS mutual fund etc upto Rs. 1.5 lakh, or invest in medical policy, if your 1.5 lakh limit has been exhausted you can further invest in NSC upto more 50,000.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Hello,

Your income from your manufacturing business would be taxable under Business Head, where a deduction for every expenditure incurred wholly and exclusively for business purposes would be allowed on an accrual basis. Depreciation and Additional Depreciation will also be allowed as a deduction from the profits as per applicable provisions.

Your rental income would be taxable under the House Property head, where 30% as a standard deduction would be allowed and further, in case you have borrowed money for the purchase, construction, repair/renovation of the property, you would be allowed to claim a deduction for the interest payable on money so borrowed.

Apart from the above deduction for income related expenditures, you can claim also claim deduction for investment-related payments made, such as Life Insurance, PPF, Tuition Fees, NSC, Tax Saving FDs, etc under section 80C, Health Insurance Premium, Preventive Health Checkup Expenditures under section 80D.

I hope that this answer satisfies your requirements. For further understanding, you can contact us directly or take a phone consultation.

Regards,

CA Hunny Badlani

Dear Sir,

Hope you are doing well !!

There are numerous slabs and sections under which you can save taxes on rental income.

It is advisable to take a phone consultation for detail discussion.

- Rental income will be taxed under income from house property only and standard deduction of 30% is available. You can claim it business income subject to the facts.

Hi

You can claim 30% standard deduction from the rental income and payment of municipal taxes as deduction form income from house property.

Yes, it will be income under the head House Property.

- Yes. 

- If you want to consider it as a business income then you need to obtain GST No. if the aggregate turnover is more than Rs. 20 lacs.

Dear Sir,

Here is my replies to your query:

1. You can save the tax from the following ways:

- 30 percent deduction allowed from the rental income if you treat the property for the purpose of investment.

- All the expenses like repair and maintenance, insurance of building will be allowed as expenses and deducted from Business income if you treat your property for the purpose of business and treats it's income as business income.

2. Yes, rental income from commercial property can be treated as income under the head house property if you hold the property for the purpose of investment. 

Thanks and Regards

Divya Chugh 

For GST purposes, you have to charge GST on rental income.

For income tax purposes, it would be income under the head house property only as you're not into a business of renting out. Your business is different.

If You have multiple godown which are rented & you are receiving income out of that than you can easily treat it as Income from business (of renting godowns) & claim all the expenses which are incurred for earning such income as deduction.

You can show it under the head of employees for administration purpose, maintenance expenses, cleaning expenses & if other services provided expense for which you are bearing can also be included.

Further Rental income from commercial Property is not income from House property.

- Better option is to consider rental income under the head house property and claim standard deduction of 30%, municipal taxes and interest on loan up to Rs.2 lacs.

Yes, it will be treated as income from house property.

There are 2 deductions eligible to be deducted from Net Annual Value of house property namely:

a) Standard Deduction of 30% of NAV.

b) Interest on housing loan.

Also, Any taxes (municipal taxes) paid to the Government during the financial year (for which the income is being computed) on the property owned, such as house tax, are allowed for deduction from the Gross Annual Value which is calculated on the basis of the total rent receivable/received/deemed rent for the property for that FY.

It is advisable to consider the same as rental income under the head house property to save more taxes.

Yes. it can be declared under income from house property head.

You would be required to charge and collect GST on the rent received for the commercial property.

Under house property, you get 30% as a standard deduction and further, in case you have borrowed money for the purchase, construction, repair/renovation of the property, you would be allowed to claim a deduction for the interest payable without any limit.

Is this godown shown in your business asset?

If yes you can show it in profit and loss account otherwise house property income.

You can plan tax but it would be better over phone consultation.