Income from Business or House Property

[SANJAY BAHETI]

A Pvt Ltd company with main object of construction of building, apartment and letting them on hirelease and selling in ownership, earns rent from these apartment. My query is whether rent earned would be taxable under the head income from business or income from house property.

[CAGOPALJI AGRAWAL]

It would be taxable under income from house property. There are only two exceptions one, it letting out is just incidental and subservient to the business of the assessee like letting out to employees etc and second if letling out property includes charges for other facility in the form of business cabins where rent can not be approtioned.

Probably your case does not seem in exceptional categories.

AI Summary

Income from house property: rent from apartments by a construction company treated as house property income unless incidental letting. The rent is taxable as income from house property for a private limited company letting apartments; exceptions are where letting is incidental and subservient to the business (e.g., lettings to employees) or where lettings include charges for ancillary business facilities such as business cabins and rent cannot be apportioned.