Property Tax on Commercial Property
If you have taken a loan for the purchase, construction, repair or re-construction of commercial property and are paying the interest on that loan, then you can take advantage of tax deduction on it. You have to claim for this tax deduction.
You are also among those people who earn from rent by renting office, shop or warehouse. if so you tax ,Income TaxThe rule related to ) must be known. Such a property comes under the purview of commercial property and its rule is different from that of residential property. Today we will try to know that tax on commercial property (Property TaxHow does it sound and what are its rules. Whether you earn from residential property or from commercial property, if you take income from rent, then you will be liable to tax under the head ‘Income from house property’.Capital Gain Tax) will have to be paid. This rule is for when you have ownership of the property.
If you do not own the property and you have let it out, then the income earned from it will have to be shown in ‘Income from other sources’ and tax will have to be paid as per its rules. However, you also get a chance to save tax. It can be easily availed under standard deduction. You can get up to 30% off on rental income in standard deduction. You can also take advantage of tax deduction on the expenses incurred on the repair of the property owned by you.
Discount on Prepayment Charges
If you have taken a loan for the purchase, construction, repair or re-construction of commercial property and are paying the interest on that loan, then you can take advantage of tax deduction on it. You have to claim for this tax deduction. Under the Income Tax Act 24(B), the benefit of deduction on interest is given on every type of property, whether it is residential property or commercial. You can also claim tax deduction by keeping the processing charge and prepayment charges paid for the loan under interest. Whether you have taken a loan from a bank for construction or purchase of a house or from a friend-relative, you can avail tax deduction on both types of loans.
Tax on sale of commercial property
Property owned by him which he uses for his business, if sold and makes profit, then it will be considered as short term gain. It does not matter how many years you have held that property. Here your tax liability will be made only under short term gain. If you have given a commercial property on rent and there is a profit on selling it, then that too will come under capital gain. If this property is held by you for more than 24 months and there is a capital gain on selling it, then it will be considered as long term capital gain. You will have to pay 20 percent tax on this capital gain.