TaxTMI 
TaxTMI 
An assessee who has been claiming depreciation on the building, his business premises owned by him subsequently entering into partnership lets out the building for rent to the firm. Queries -------- A) The rental income can the partner start showing as his Income from House Property in his individual return? B)In the event of sale of the property may be after three years will the partner the owner can take benefit of indexation and offer the same as long term in his Return.Will it get affected by the section 50A and treated as short term.
Partner transfers his assets to the firm - tax liability on rent, capital gains etc.
ravichandran ramakrishnan
Tax Implications of Partner Asset Transfer: Rental Income Classification & Capital Gains Under Sections 50 & 50A. A partner transferring his assets to a firm raises questions about tax liabilities on rental income and capital gains. The discussion focuses on whether rental income from a building, previously depreciated and now leased to the firm, should be reported as income from house property or business income. It is advised to treat the rent as business income to claim depreciation and plan for new acquisitions. Section 50 and 50A implications are discussed, highlighting the need for careful tax planning, especially concerning the sale of depreciable and non-depreciable assets, and potential tax-saving strategies through reinvestment in specified bonds. (AI Summary)