Composite income taxability and PTS

Discussion in 'Tax planning' started by jamesh, Feb 26, 2014.

  1. jamesh

    jamesh Member

    A client has House Property income (~42 lacs) as well as Maintenance Income(~30lacs) - from the same house property . Going by the Composite Income concept, the Maintenance Income is charged under the head Business Income. After allowing certain expenses the taxable income undr BP comes to the tune of Rs.16 lacs. As per my Principal, we cannot use PTS (section 44AD) in this on Maintenance Income because it's related to Rental Income and it may not be possible to establish the fact that the Maint. Inc. is a part of the business income. But what I am unable to understand is that if we are already taking the Maint. Income under BP, then why isn't it possible to avail PTS. If we can use PTS, the taxable income under BP wll come around Rs.2.4 lacs as against Rs.16 lacs under normal taxation. So what would be the valid and correct measure?

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