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Anil Jain is a partner in a firm. He also earns rent from a house that he owns personally. In whose hands, and in what capacity, is the rent assessed?

Question and options

Anil Jain is a partner in a firm. He also earns rent from a house that he owns personally. In whose hands, and in what capacity, is the rent assessed?

  1. In the firm's hands, as the firm's income

  2. In his own hands, as an individual

  3. In his family's hands, as a Hindu undivided family

  4. In the hands of the partners, as an association of persons

Answer and explanation

Correct answer: B - In his own hands, as an individual

Section 2(77) of the Income-tax Act, 2025 treats an individual and a firm as separate persons, so a partner's own income, such as rent from his own property, is assessed in his hands as an individual. It is not the firm's income, which covers only the firm's business, nor HUF income, since the house is his separate property.

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