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Rent from a shop or office I own

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Rent from letting buildings, whether residential or commercial, is generally taxed as house property income. It becomes business income only where letting is your business in a real sense, or the property is used in your own business. Most individual landlords show it under house property.

Provisions

Sec 22 (now Sec 20); Sec 24(a) (now Sec 22(1)(a))

Analysis

A shop let out at ₹50,000 a month gives ₹6,00,000 of rent, reduced by municipal tax and 30% under Sec 24(a) (now Sec 22(1)(a)). Business tenants deduct TDS under Sec 194I, which you claim. If the property is used for your own business, there is no rent income and the property is treated in your business accounts instead. Charges for services like security may need separate treatment.

Close

  1. Confirm the property is let out, not used in your business.
  2. Compute rent less tax and 30%.
  3. Claim TDS deducted by tenants.
  4. Report each property in Schedule HP.

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Connect nowPay and start: Return with rent from two or more properties and home loan interest, Sec 24(b), ₹2,499

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