Received income from business and rental. As per income tax I have to show income from business and rental income separately?

Received income from business and rental. As per income tax I have to show income from business and rental income separately?

GST and Income Tax Treatment for Your Business and Rental Income

Your total turnover is ₹25 lakh, which includes income from both business and rent. As per income tax rules, you need to report business income and rental income separately.

1. Turnover Calculation in GST

Since your turnover includes both business income and rental income:

• GST Registration:
  • If your taxable supply exceeds ₹20 lakh (₹10 lakh in some states), GST registration may be required.
  • If rental income is from a commercial property, it is subject to GST.
  • If rental income is from a residential property, it is not subject to GST unless rented to a registered person.

2. Why Should Business and Rental Income Be Reported Separately in Income Tax?

As per the Income Tax Act, 1961, income must be classified correctly based on its nature:

• Business Income – Must be reported under the “Profit & Loss Account.”
• Rental Income – Should be reported under “Income from House Property.”

Tax Calculation

• Business income is taxed based on total revenue and expenses.
• Rental income qualifies for a 30% standard deduction, after which the remaining amount is taxed.

3. Compliance and Recommendations

✅ GST Returns: If registered under GST, you need to file GSTR-1 and GSTR-3B.
✅ Income Tax Returns (ITR):

• If your business is a sole proprietorship, you need to file ITR-3 or ITR-4.
• Rental income is declared separately under Income from House Property.

If you find it challenging to manage GST and income tax compliance, consulting a tax professional (CA) is recommended.

Do you need help with a specific situation? 😊