No. You can't get refund of the same.
Moreover, if the sole purpose of formation of LLP is owning properties and earning rental income, then the income is taxable under business head.
LLP property for zero IT liability individual
I am planning to invest in a property as co-owner (fractional property for which all co-owners are forming a Limited Liability Partnership (LLP)) for which I receive monthly rent. The rents received, I understand from the property management, will be taxed at 21.63% under LLP. However, as I am investing only about Rs 20 lacs, the rental income I receive in a financial year does not exceed individual tax exemption limit of Rs 2.5 lacs. As I do not have any other income (or is insignificant), my tax liability is zero. But, since 21.63% tax is already deducted from the rent received every month can I get a refund of this when I file my annual tax returns. Thank you in advance for your advice.
Asked 6 years ago in Income Tax
The tax will be deducted upfront and the property management will provide me with certificate. In which case with which ITR do I file and when I have some other income outside the LLP, like FD interest etc. Do I need to declare the rental income I receive from LLP property (and in which ITR) and how do I get credit for the taxes already deducted.
Asked 6 years ago
You may file ITR-2 showing your share of income from LLP and other income.
Yes, you have to show the share of income received. You don't need to pay taxes on such income as taxes have already been paid by the LLP.
You won't be getting any credit of such taxes paid.
Hi,
If the property is under the name of LLP, then LLP will have to pay tax on it and unlike individuals LLP does not enjoy the benefit of exemption limit amounting to INR 2.5 lacs. Hence, LLP has to pay tax on it @30%. In house property, effectively you pay tax only on 70% of your rental income. Hence effective tax rate can be considered as 21%>
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi,
If the rent agreement is between the LLP and the tenant, then you cannot claim refund of the tax deducted. The LLP will offer the rental income to tax and claim credit of the tax already deducted.
If the rent agreement is between the co-owners and the tenant, then you can claim refund of the tax deducted.
Trust this clarifies.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Hello,
Yes, you can claim for a refund while filing your income tax returns for any excess tax deducted.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
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