CBDT clears the air on rental incomes from industrial parks, SEZs
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The Central Board of Direct Taxes (CBDT) has made it clear that income from letting out buildings /developed space along with other amenities in an industrial park/special economic zones (SEZs) would only be treated as “business income” and not as “income from house property”.
This stance would come as relief for taxpayers as such rental/lease income can now be counted for computation of tax breaks by such industrial parks or SEZs, say tax experts.
Hitherto, assessees were claiming the letting out as business activity, the income arising from which to be charged to tax under the head ‘profits and gains of business’. Also, the assessing officers were holding it to be chargeable under the head ‘income from house property’. If the CBDT had treated such incomes as “income from house property”, then assessees would not have been entitled to count such rental income for computation of tax breaks eligible for industrial parks/SEZs.The CBDT has also now advised the Income Tax Department not to henceforth file any appeals on this settled issue. Those already filed may be withdrawn and not pressed upon, the CBDT told its field formations in a circular.. #casansaar (The Hindu Business)
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