I am planning to register a business (after R2I this year) and like to have a car partially for business purpose. In other words, I like to use a single car for personal use as well as business purpose. Is that allowed?
Can I buy a car in the name of the business and use it partially for personal purpose as well?
Same for a house too. Can I use 1 floor of a rental house as guest for the business?
Car and guest house for business purpose: how to handle this for best tax saving
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Indian Heart
- Posts: 39
- Joined: Fri May 07, 2010 8:04 pm
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kkassociate
- Posts: 173
- Joined: Mon Oct 05, 2009 4:45 pm
Car and guest house for business purpose: how to handle this for best tax saving
Dear Indian Heart,
You need to first identify what structure are you looking to set up:
1) Sole Propreitorship
2) Partnership
3) Limited Company
In Sole Propreitorship there is no trouble as you can own the house and car in your name and depreciate it against your revenue. You need to enter into a separate agreement to claim the rental expenditure for the business.
In partnership and limited company structure the assets have to be in the name of the the organisation to claim the depreciation. If you purchase the house in your name and intend to rent a part of it to the partnership or limited company you should have an agreement in place. Also there are procedures involved for bringing partnership and limited company in existence. Various benefits are available in these forms of organisation which can be discussed after your decision.
We provide assistance in US and India tax filings, Company formation and all related aspects, you can email us at [email][email protected][/email]
Regards,
KKA
You need to first identify what structure are you looking to set up:
1) Sole Propreitorship
2) Partnership
3) Limited Company
In Sole Propreitorship there is no trouble as you can own the house and car in your name and depreciate it against your revenue. You need to enter into a separate agreement to claim the rental expenditure for the business.
In partnership and limited company structure the assets have to be in the name of the the organisation to claim the depreciation. If you purchase the house in your name and intend to rent a part of it to the partnership or limited company you should have an agreement in place. Also there are procedures involved for bringing partnership and limited company in existence. Various benefits are available in these forms of organisation which can be discussed after your decision.
We provide assistance in US and India tax filings, Company formation and all related aspects, you can email us at [email][email protected][/email]
Regards,
KKA