Depreciation

Hi,

My wife is in IT tax bracket of 30% .She is getting rent from office bldg. & interest income.
She is also taking joint home loan benefit of interest & principal for residential house .
Now she wants to buy a car .
She is also getting 2nd house benefit by deemed income from rental as this is vacant.
She will be also receiving some income from property consulting.
Is it a good idea to take car on loan & to get depreciation & interest benefit.
Best Regards

A.K.GUPTA
Asked 2 years ago in Income Tax from Gurgaon, Haryana
As your wife is having consulting income, this income will be treated under the head "Income from Business & Profession". All reasonable expenses incurred in connection with the earning of such income, including depreciation, interest, vehicle maintenance etc. can be claimed as expenditure against such business / professional income. 

If there is loss from such business/profession, it can also be set off against the income from house property and income from other sources as per the provisions of the Act.

The only relevant test is that the expenses being claimed should be reasonable and attributable to the business/profession.
B Vijaya Kumar
CA, Hyderabad
633 Answers
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It is a good idea but this should not be done for tax advantage but there should be business or personal necessity.
Vijay N. Kale
CA, Hyderabad
248 Answers
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In the present case you can claim depreciation and interest benefit only out of income from property consulting . In house property you cannot claim interest and depreciation benefit.
Shyam Sunder Modani
CA, Hyderabad
1373 Answers
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Yes! The income from property consulting will be shown as business income and you can claim depreciation on the car that you purchase. The interest on loan for the car can also be claimed as expense. 
Rohit R Sharma
CA, Mumbai
1680 Answers
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