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MATHEW (PROGRAMMER)     13 December 2010

Taking the rent in a different name

Dear Sir,

When I rent out my flat, Cal I take the rent in my son's name who is a student ,  to avoid Tax ??





 4 Replies

SALA SATEESH (lawyer)     13 December 2010

Dear Sir,

in whose name the property is bearing if it of you not  the son then the payment made is wrong as it could come under purview of IT act.


if it is in the name of your son obviously then as said by you would of valid.



DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     13 December 2010

As long you have good relations with your tenant no problem , otherwise defficult to evict him if the matter goes to court. All other problems are minor.

A V Vishal (Advocate)     13 December 2010

For the purpose of section 22, the concept hitherto understood even in court decisions has been that the owner has to be a legal owner. Annual value of property is assessed to tax under section 22 in the hands of owner even if he is not in receipt of income or even if income is received by some other person. For instance, if a person makes gift of rental income to a friend or a relative, without transferring ownership of the property, annual value of property is taxable in the hands of the donor, even if rental income is received by the donee- S. Kartar Singh v. CIT (1969) 73 ITR 438 (Delhi). In other words, for the purpose of section 22, the owner must be that person who can exercise the rights of the owner, not on behalf of the owner but in his own right-RB. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC).

Further, even the income if were to be of the minor son then under S.64 (1A) all income accruing or arising to a minor child is to be included in the income of his parent.

Ram K (Manager)     16 December 2010

the rent should be credited in the account of absolute owner of the property for safeguard themself. if you bought the house throug HL, you can claim tax exemption on principle and interest paid by the borrower.

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