nupur agarwal (trainee) 04 November 2012
I am trying to buy a rented property of approximate Rs. 5 crores with bank loan for future rental income and property appreciation. Considering that we have to take a loan and good income might be generated in future by way of rent and property appreciation capital gain, should this property be brought in personal name or limited liability partnership or private limited. Let me know the advantages and disadvantages associated with it and the reasons thereof
S Jadhav 98336 98330 (Jadhav & Associates) 05 November 2012
Dear Agarwalji,
You can buy on any name you wish as far as legal issues are concerned.
If you wish to look at taxation matters and future income, then buying in the name of a company is better since you may be able to transfer the property at a lower value of stamp duty by transferring the shares if the company. Please note that the company should have some legitimate activity and should not be used only to avoid stamp duty.
All interest and other expenses are allowed to be deducted from the rental income so it is beneficial.
S Jadhav
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