Question ID :
Rental income in a Partnership firm on properties owned by partners
There are 2 NRI's holding a piece of land and are willing to construct a residential/commercial complex with an intention to earn rental income. Construction is carried out partially with own funds and partially using a bank loan.
As per RBI Master Direction on FDI... this activity is permitted as it is specifically excluded from definition of real estate. IS this interpretation correct ?
Now they want to have a partnership firm wherein there will be 3 partners out of which 2 of them will be the NRI and 1 Person will be a Resident. The objective of the partnership firm shall be to receive the rental income on such constructed complex. The objective of firm shall be leasing of property.
Can partnership firm receive rental income from the property owned by its partners?
what are the other / better ways to execute this ?
Citation of any section/circular/case law will be very much useful.
Thanks a lot
Jun 2 2021 12:00AM