Please clarrify me that if Son Paid CAR RENT to Father and use the car and father Shows car rental income in his income tax return Can they do this as per income tax
14 January 2008
yes both are separate individuals in the eyes of law and have their separate returns to be filled as long as son is paying the rent for usage and the father is showing his income it is allowable as an expense to son as rent paid and income of father as Income from other sources or business Income of hiring of car.
15 January 2008
if car is in the name of father then the father will give a car on rental basis and son eill get exp.in his a/c if total payment is in excess of rs. 50000.TDS should be deducted if tax audit is applicable to the indivudal
17 January 2008
In my opinion:- There is no bar on having such business transactions with relatives. The only point to be kept in mind is that the consideration pid and received should be reasonable and should not deviate marginally with market rate.
CAclubindia
