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Taxability  of composite rent in Income Tax

What is composite rent?

The owner of a property may receive rent in respect of the building as well as for facilities provided with the building. The amount so received is known as "composite rent".

For example - House let out with car parking facility.

Tax treatment

  • The portion of rent attributable to use of the property will be taxable under section 22 as income from house property.
  • The portion of rent attributable to use of facilities will be taxable under the head "Profits and gains of business or profession" or under the head "Income from other sources".
  • If letting out of the property and other asstes are not separable then the rent will be taxable either as business income or income from other sources.
  • If letting out of the property and other assets are separable then

(i) the income from letting out of the property will be taxable under head “Income from house property”;

(ii) Income from letting out of other assets will be taxable as business income or income from other sources;


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CA Rupali Gupta

CA Rupali Gupta