Partnership Firm and House Property Income

[KIRTI TULSYAN]

Dear All Members,I have a query,in regards to House Property Income only and 
in partnership firm status.Can a partner ship firm be form with only having 
sole object to give property on rent and shown the income from house 
property head? If yes then what special clause to be frame in drafting the 
deed?2. What is to be treated in regards to int paid to partners, can it be 
allowable, if No, then can it be possible to claim the int paid to parters 
from rent income,as deduction, if yes then how to be mention in deed, and in 
this case can the partner introduce capital in cash?3. What about the 
treatment of remunuration clause to working partners?Thanking you AllRakesh. 

REPLY 1

Partnership Firm can be formed with the object of renting out house property 
as it's business. The income yielding from rent of let out house property 
should come under Income from Business U/S 28 of I.T Act if the Property is 
registered in the name of Partnership Firm. 

NEW REPLY 1

Renting of income will be chargeable to tax under the head 'Income from 
house property'. It does not make any difference whether letting of property 
is business. Kindly refer various judgments on this issue. Whether it is 
renting per se or it is exploitation of property. It all will depend on 
facts of the case. 

NEW REPLY 2

If the Partnership firm is earning interest as business income then interest paid to the capital introduced in the firm is an allowable deduction U/S 40(b) and accordingly interest paid shall be allowed as deduction of the firm.



Thanks 

CA. Pankaj Agrwal 

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Best Regards, 
Kirti Tulsyan
B.Com.,ACA,CS


P.D.Rungta & Co. 
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[Ashok Gosar]

Income from leting out of Imovable property will be taxed under the head "Income from House Property". whether the assessee is individual, H.U.F., firm, or company..

Ashok L. Gosar (B.com.,F.C.A.)
Mumbai
91- 98213 35006

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