LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Income from house property

Roli (manager ) (39 Points)

04 August 2015

Me and my husband booked a apartment in joint name for a total value of say 'X'.

I paid the amount "Y" directly to builder from my bank account.

My husband paid the balance amount from his bank account and from the home loan taken from bank for which he is paying the EMI.

My question is "In what proportion will the income (rental) from this property will be shared between me and my husband for purpose of income tax."

Note: There is no clear mention of the % share of the property in apartment booking agreement with builder

Reply
Follow
Share

8 Replies

Udgam Koomar (Tax Technologist) (1949 Points)
Replied 04 August 2015

If you have a jointly held property, the rent received from it will be taxable in the hands of each co-owner based on the respective shareholding. “The rental income will be distributed among the owners based on the proportion mentioned in the purchase deed or agreement. Further, if there is a housing loan, the proportion in which the loan has been taken should be the same as the proportion in which the property is jointly owned. Once this ratio is decided, it cannot be changed during the period the property is held. Just having a second name doesn’t make you an equal holder of the rental income.

Roli (manager ) (39 Points)
Replied 04 August 2015

Thanks for the reply, that goes in saying that even though I have invested my money in the property but as my share is not defined in the purchase deed, I can't claim my share in the income from the property.am I correct? Is there any way this can be corrected?

S. Shiroor (Others) (1207 Points)
Replied 04 August 2015

you have paid Y. If the loan taken is L that mean ur husband has paid H = X - Y - L.

If you share the loan equally then your share in property is Y+L/2 and ur Husbands share is H + L/2.

So you must share the rent in ratios (Y+L/2) /X and your Husband should share (H+L/2)/X. .

If both of you are filing return then both can take advantage in that ratio. You should bear the EMI for L/2 by giving the like amt to Husband's account.

Shiroor

Structural Consultant for design of Bridges.

CS and ACMA Raju lakhani (Working in Public Co.) (340 Points)
Replied 05 August 2015

How we can do correction in tds payment challan major head

Roli (manager ) (39 Points)
Replied 05 August 2015

Thanks Mr Shiroor, I am not capable of paying my part of the EMI as I don't have source of income. In that case what will be my share?

Z ( ) (2960 Points)
Replied 05 August 2015

Suppose total cast is 40 Lacs and you paid 10 Lacs and rest will be paid by your spouse 30 Lacs (whether fully from loan or partly from loan)

Your share = Payment made by you Divide by total cost

Your share = 10Lacs/40 Lacs= 25% share

Rental income is to be shared in the ratio so computed

Rajendra sahoo (student) (22 Points)
Replied 05 August 2015

Depends upon the agreement between co-owner.

S. Shiroor (Others) (1207 Points)
Replied 05 August 2015

Your Share is Y and Ur Husbands share will be H+L. ur ratio is Y/X and his share will be (H+L)/X. You can find out that sum of ratios of Y/X and (H+L)/X is 1 .

Now Rents should be taken in above ratios

While filing return The property tax paid and rent received shall also be in the same ratio above.

While filing ur Husbands return interest on borrowed capital shall be taken only by him bcoz he is paying the EMi . Also the principal amt also should be taken only by him and clubbed with other 80C.