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TMI BlogPartner transfers his assets to the firm - tax liability on rent, capital gains etc.X X X X Extracts X X X X X X X X Extracts X X X X ..... Partner transfers his assets to the firm - tax liability on rent, capital gains etc. X X X X Extracts X X X X X X X X Extracts X X X X ..... o the firm. Queries -------- A) The rental income can the partner start showing as his Income from House Property in his individual return? B)In the event of sale of the property may be after three years will the partner the owner can take benefit of indexation and offer the same as long term in his Return.Will it get affected by the section 50A and treated as short term. Reply By DEV KUMAR KOTHA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RI: The Reply: Letting out of property to the firm in which the owner is partner will amount to use for business purppose, and owner / partner will be entitled to claim depreciation. Even if by chance/ mistake rent from firm is assessed as income from House property, S. 50 and 50A will apply. If he has plan to purchase other building falling in same block, he can avoid fully or partly tax dependin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on result of calculations of amount of WDV of bld + cost of new asset in same block - sale value of old bld in sameblock. if the owner of any asset has been allowed deprecation at any time, then section 50 apply. Suppsoe income returned as income from HP is accepted, the assessee will continue with contingency of rectification, revision or reassessment for treating the rent as incoe from busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. Best course is to treat rent as business income , calim deprecation, and plan new acquisition in the year of sale. land being not depreciable asset,will not be subject to S. 50 and you can plan LTCG on sale of land and reinvestment in specified bonds etc. Even for bld. investment in specified bonds can be a tax saving device as bld is held for more than 36 months and it is a Long term capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal asset, for which benefits are availabe even if gains are considered as STCG u/s 50. X X X X Extracts X X X X X X X X Extracts X X X X
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