Deemed Owner and Rental Income

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Nagaraj (Querist)
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22 February 2011 Sir,

"If an individual transfers property for inadequate consideration or gifts it to his spouse or a minor child other than a married daughter,he will be treated as deemed owner of that property."

1.But son transfers property for inadequate consideration to his mother, will he be treated as Deemed owner?
2.In that case whose hands rental income of the property taxable?

CA Punit

CA Punit (Expert)
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22 February 2011 it will be considered as gift in the hands of mother.. and as it is received from relative (son) it won't be taxable.
Further rent income therefrom will be taxable in hands of mother.

any other view will be appreciated

Nagaraj

Nagaraj (Querist)
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22 February 2011 If any immovable property received –
(a) without consideration, it is taxable as income from other source, but it excludes from relative.

In our case transfers property for 'inadequate consideration'. section 56(2)(vi) says without consideration.

can you just solve my confustion?

Nagaraj

Nagaraj (Querist)
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CA Punit

CA Punit (Expert)
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22 February 2011 Gifts include property recieved for
without/ inadequate consideration, both.

Guest

Guest (Expert)

22 February 2011 Agree with Mr. Puneet but there is no termlogy 'deemed owner of that property'

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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22 February 2011 The terminology "deemed owner" can be seen very much in section 27 of the IT Act,1961.

Guest

Guest (Expert)

23 February 2011 But succeeding queries do not relate to Sec. 27.

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