I-T dept is watching, claiming rent as business income won't be that easy

Taxation depends on whether the property is let out to enjoy the rent or the owner is exploiting it commercially

A common point of dispute between taxpayers and the Income-Tax (I-T) authorities is the treatment of rent earned from a property. Taxpayers like to show such rent as business income as they get the benefit of depreciation, higher deduction of expenses, and the owner doesn’t need to pay any notional rent when the property is not let out. As it leads to revenue loss, the I-T department scrutinises every case in depth to see if the taxpayer should be allowed to claim rent as business income.

The primary reason for disputes is that the I-T Act doesn’t provide a definite answer