Welcome to Monday Corner, an initiative from Tax Publishers…

Quiz for the week (21 Jul 2025) :

Rakesh has a vacant land measuring 3000 sq.ft in a prominent location. He got a business proposal from his long-time friend Jay who wants to run a hotel. Jay has given 3 proposals to Rakesh. They are (1) lease the vacant land to Jay who may construct a building either alone or in partnership with others and pay lease rent of Rs.3 lakhs per month to Rakesh;(2) admit Rakesh also as a partner and pay 10% of daily sales as compensation or not make Rakesh a partner but pay the same amount without any monthly fixed rent; (3) advance interest-free loan to Rakesh of Rs.1 crore for putting up a construction of hotel building and adjust 5% towards recovery of loan and pay only the balance to Rakesh based on sales. Which of the proposals could be tax efficient from their perspective?

Share your thoughts on the above on or before 28th July, 2025

Email your reply at quiz.taxpub@gmail.com

Answers :