Residential tax to commercial tax

Question

Residential tax to commercial tax

21-Mar-2023 (In Tax Law)

I live with my wife in Bangalore in a rented house with an attached garage. My wife, a BDS wants to run a Dental Clinic in the garage. The owner does not have any issues but said that if the clinic is registered, they will have to pay the house tax under commercial usage. What should I do and what are the charges/taxes applicable.

Answers (1)

Answer #1

Adv. Chikirsha Mohanty

Delhi | 200+ Answers

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LawRato LawRato · Accepted Answer · 2017-03-21T19:53:39+05:30

Yes you can open a clinic in the ground floor garage. The property which is residential can be used for commercial purposes, but only a certain amount of space can be validly used for the same. Doctors, lawyers, CA can use 30%of residential premises for consultations. That would not be regarded as using property for commercial purposes. If more than 30%of flat is used for commercial purposes then they would have to pay the commercial tax. You can adjust the same by increasing your rent.
Three important conditions to be fulfilled are-

Obtaining permission from the local municipal authorities for the conversion, depending on the nature of the business.
The business should not cause nuisance to other dwellers of the society.

No-objection statement from the landlord is mandatory in addition to normal approvals.