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Bharat Changela   18 May 2024

Tax on Rental Income

I have flat in joint name with my wife. I have availed housing loan and claiming Tax rebate on interest u/s 24(b).
Now, I want to let this property on leave and licence agreement.
The rent income may be appx 1.50 L annually.
Can I make legal agreement with tenant by my wife, and entire rent income shown in her name to avoid/lower Tax on rental income?


 3 Replies

T. Kalaiselvan, Advocate (Advocate)     19 May 2024

In the case of joint ownership, all co-owners are responsible for paying taxes on joint rental income. Furthermore, they have to pay taxes in proportion to their ownership.

Jointly owned properties are taxed individually, not as a group. Each co-owner is responsible for paying taxes on their share of the property's income and capital gains. The TDS liability for jointly owned properties is typically divided among the co-owners in proportion to their ownership share

Dr. J C Vashista (Advocate )     19 May 2024

Your wife can rent it out.

Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer)     20 May 2024

If you are claiming tax rebate in your own name and not in your wife's name, any rent receivable from the property will be taxble in your hands only. But if the rental agreement is made between your wife and the tenant and rent is paid to your wife, the income tax department will not come to know of it. Does your wife have taxable income and does she file income-tax returns? If so she will have to report the receipt of rent as income from house property and details of ownership of the house property also may have to be given. With PAN Nos. etc there is a small chance of the Income-tax department co-relating returns.

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