Rent income in huf
This query is : Resolved
15 May 2014
I have question related to my property and its let-out / Lease income ? I owned one flat in Mumbai and it is solely on my name, I am the only owner of this House. Now I want to rent / letout this flat, But want to receive the rent in my HUF account is it possible ?
15 May 2014
no
rent will be taxable in your hand not in HUF .
rent will be taxable in your hand not in HUF .
15 May 2014
thank for the replay
But both the entity is separate under the income tax , It is in the name of Individual but Individual wants to take his income in his HUF account . Please clarify me more about the above.
But both the entity is separate under the income tax , It is in the name of Individual but Individual wants to take his income in his HUF account . Please clarify me more about the above.
19 May 2014
Pz replay its urgent.
21 July 2025
You're right to point out that an individual and their HUF are two separate legal entities under the Income Tax Act. However, when it comes to taxing rent income, ownership of the property is the deciding factor — not where the income is received.
✅ Here's the clear legal position:
"Income from House Property is taxed in the hands of the person who is the legal owner of the property, regardless of where the rent is deposited or received."
❌ So, Can You Show Rent Income from an Individually-Owned Property as HUF Income?
No, you cannot divert rental income from your individually owned property to your HUF account and show it as HUF income for tax purposes.
Even if you physically deposit the rent into the HUF’s bank account:
It does not make it HUF income.
The ownership remains with the individual, and
Hence, income is taxable in the hands of the individual owner — not the HUF.
🔍 Why?
Because:
Ownership and income go together: Section 22 of the Income Tax Act clearly taxes the rental income in the hands of the owner.
No legal transfer has taken place from individual to HUF.
Simply routing income through another entity’s bank account does not change tax liability.
✅ If You Want the Rental Income to Belong to HUF:
Here’s how you can make that happen — legally:
Option 1: Transfer the Property to HUF
You can gift or transfer the property to the HUF (subject to stamp duty and legal implications).
After transfer, rental income will be taxed in HUF’s hands.
⚠ Note: As per Section 64(2), if the property is transferred without adequate consideration, income may still be clubbed with your individual income.
Option 2: Buy Property in HUF's Name
For future purchases, buy in the name of the HUF (with HUF funds).
Then the rental income rightfully belongs to the HUF.
✅ Here's the clear legal position:
"Income from House Property is taxed in the hands of the person who is the legal owner of the property, regardless of where the rent is deposited or received."
❌ So, Can You Show Rent Income from an Individually-Owned Property as HUF Income?
No, you cannot divert rental income from your individually owned property to your HUF account and show it as HUF income for tax purposes.
Even if you physically deposit the rent into the HUF’s bank account:
It does not make it HUF income.
The ownership remains with the individual, and
Hence, income is taxable in the hands of the individual owner — not the HUF.
🔍 Why?
Because:
Ownership and income go together: Section 22 of the Income Tax Act clearly taxes the rental income in the hands of the owner.
No legal transfer has taken place from individual to HUF.
Simply routing income through another entity’s bank account does not change tax liability.
✅ If You Want the Rental Income to Belong to HUF:
Here’s how you can make that happen — legally:
Option 1: Transfer the Property to HUF
You can gift or transfer the property to the HUF (subject to stamp duty and legal implications).
After transfer, rental income will be taxed in HUF’s hands.
⚠ Note: As per Section 64(2), if the property is transferred without adequate consideration, income may still be clubbed with your individual income.
Option 2: Buy Property in HUF's Name
For future purchases, buy in the name of the HUF (with HUF funds).
Then the rental income rightfully belongs to the HUF.
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