Tax part 1

income unsler the Heaa hcome srom House Proper" ge op rmanor child and the tensteres nccuires a asb, the Iransstor seall nt be treated as Ceeimel owzer if the hoss pruperty Such its ncon will however, altract Holder of an impartible estate ISection 270] The holder of an impartible estte sball be deetred to be the individual owner of all properties comprised in the es ate. The impartible estate, as the word itseif suggests. is a properly which is not legally civisib'e Member of a Co-uperative Soclety, etc. Section 27nl A memher of a co-eperative society, company or other association of persors to whom a building or part thereu? is alot.ed or leased under a louse Building Scheme of a socictyicempany/assoe ation, sha:l be dee med to be owne: of that building or part thereof allotted to nim although the co-operative society/company/association is the legal owner of that building . Person in possession of a property [Section 2T(itia)l: A person who is allawed to ake or retain the possession any building ot par: thereof ia part perfenmuance of a contract of tae nature refered to in section 53A ot the Transfer of Property Act shull he éeemed owner of that house property. This would cover cases where the (a) possession o property has been handec over to the buyer, ib) sa.e consideration has been paid or promised to be paid to the seller by the buyor, (c) sale soed has not been executed in favour of the buyer, although certain other documents like power of attorneyagreemen: to sel/ will etc. have been exccuted The buyer woulć be decmed ta he the owner of the property although it is not registered in his namme Person having right in a property for a period not less than 12 years Section 27ibl: A person who sequires eny rigat in or with respec: to any building or pact thereof, by virtne of eny lransaction as is referred to in section deemed to he the owuer of that building or 269UA ie trarsfer by way of cast for not less than 12 years shal be deemed to he the owner part thereof. This wil uot cover the case where any right by way of s lease s aoquired fiom month to month for a pericd not exceeding one ear (il) ise uf the House Property: Fo: the pur posc of charge under tdhe head income from house property, the crucial e purposs ur wlich the building, etc. is being used is not material. Ihus c. The inseme derived tonm and house property may he lel by the assessee tor residential purposcs or letting ont of such uuse property will always hc taxable vačer lihis head. Even if it is the business of the asaessee iv own for any commeicia purpos give houscs on rent the amial valne of the houses owtae d by him during the previous ycar wculd he taxsule as Income from house poperty. The arlluest house property, theugh helonginy to a business, musit he o under sccrion 28, i the property is not sed ay the ssessce for e purposca of his busiress. I: wil remain so e assessee as stöck in trade cl a basiness. House ewnng, however pofitable, is neitier tade nor busiress for the rurpuse ot the Ae: Hnwever, de following are the exceptions to the above rile lue cf the aouse oropcrty purlivu of the house property which is use for purpuse ef tlhe busines or profession caruied or by tho nssossee dues not fall under Ius head. provides profis of such business or profession If an nssessee is running a botel or guest ueen let our, incoue from suah hotel building shail ying guest eccommods ion in a building owned by aim. icome ftom suon huilding shaill bc taxuble ander the head business er professien. On the cther hand. il such hoal building itself has taxable uncer the ead noase p (R) Where the property is let cut to enuployees wh the vject ef carrying ou the basiness of the assussee in an efficiert manner, then tie reatal income sual be taxable as tusiness inweanc (providsd 'etting is not the main busiress bu it s subservient iucidental te tie main husiness) beear se the letting on: of the pruperty is incidentni to the main business of the ascssec end in dis case deductions+l luwances wanli have to be enlculated as relaing te profitygains ul busitness and not as ielatirg r house prmarty Similaly. where the premises oi the assosse are givon tw any Govemment agency for locating a brunicth of a bank police statier, excise office, etc. for he parpose of ruuming the siness of the assessee more cfucientiy, tha rental income frorri such buildings wonld bu taaable as basiness income. incomc would be taxable as profitrs ur gains ol business atal profession or ircome frem other sources (C) Where the lerting of the propery is inseparable thom letting oi uther asscts ike machinery. urniture, etc. the entire In certain cases, the owner charges rent lrom the tenant not mily oa account of rent or thc heuse property out also c account of various facilitics/services provided wite rouse. Sucth rent is lnown as composie cent. I he said composil. rent 5.4 Cases of Compnslte Kent Can (a compesite rent on accuunt of rent for the properiy and for varivus faciiries services provifed ulengwith the house up and the partion of rent attr bulable ta the letting ol the nromises shal he assessable as "Tnogmie lroar House Propery The other portion of the composite ror. received Foc rendering facilitics or scrvices shall bc essessable as like lift, uas, water, electrivity, watch and ward, air conditiuring ete. lnFas case such composite rent should ze split ncome fiom Other Sources"