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STUDENT.... (.......)     05 April 2014

Clarification required

Hi Team,

 

Please confirm..

A (Father), B(Son) and C(Daughter).

 

B has received 3 properties from A via Gift Deed.

 

Here B want to declare his father A as a caretaker of the all the 3 properties through POA.

B also want to declare that what ever Rent will come through all the 3 properties should be given to A as a salary as A he is acting as a caretaker of those properties.

 

A is responsible to give property on Rent, Collection of Rent and Maintenance of Properties. Where as B is taking responsibility of Paying Property Tax.

 

My Query here is does B is responsible to pay income tax on the Rent received from the all the 3 properties, Where as A is taking the rent as his income being a caretaker as mentioned in POA?

 

Thanks...



Learning

 5 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     06 April 2014

Income tax payable by property owners. A is not property owner. He is only POA holder. 

STUDENT.... (.......)     06 April 2014

Sir @Ramachary: Here A is earning from the Rent as he is designated as a caretaker of the property in POA and B is not getting anything from the income gained from Rent.

 

On the other hand B is getting salary from his company where he is currently working and out of his salary he is also paying tax on property.

 

So how B has to pay income tax where as he is not taking any rent what ever rent is coming he is giving to A as a salary as A is designated as a caretaker of the property in POA and B has mentioned in the POA that A will get salary being a caretaker of the property.

T. Kalaiselvan, Advocate (Advocate)     07 April 2014

As per you though A is the power agent, he gets salary as a caretaker of the building/properties.  Thus the rentor whatever it is, it belongs to you which in turn has been paid as a salary to A by you for the purpose he has been appointed  by you.  Therefore it is a revenue income on property for you whereas for A it is a salaried income. Now you decide about this issue in the way you interpret the same.

STUDENT.... (.......)     07 April 2014

@Sir T.Kalaiselvan: Thanks for your reply..

 

But see here...

 

If B is earning rent of Rs.1Lacs it becomes his income as 1 Lac Rs...

 

Now when B pays the same amount as Salary to A then B income turns to 0 instead of 1 Lacs..

 

and if the income becomes 0 then how he can pay tax..?

STUDENT.... (.......)     07 April 2014

ok tell me on this as well... What if father ask for maintanance as Rs.1lac per annum and the son is ready to pay maintanance to his father.. then also the son has to pay tax on Rs.1Lac..??


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