In the case of a firm that carried on construction activity and upon completion ,it has retained some of the property ,which is let out ,on a sizable rent . Whether remuneration and interest to partners is available against the property income?
Whether a firm without any previous business activity purchases a property and earns rental income,deduction u/s.40(b) is allowable? Would the schedular system of taxation entitle the firm to the above claim
Please give your response.
if the firm is formed only for construction and its business is construction of properties and getting rent on those properties then the receipts are to be taxed under the head business income not under the head income from house property. Therefore, the remunaration and interrest is allowable.