Rental Income taxation if Jointly Owned Property

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This discussion clarifies the taxation of rental income from jointly owned properties. Regardless of who physically receives the rent in their bank account, the income is taxed based on each owner's percentage of ownership as stipulated in the rental agreement. It is not possible to arbitrarily assign the income to one owner to reduce the tax burden on another.

D M

D M (Querist)
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06 August 2024 Hi Team,
If we have a jointly held property and rental agreement is made with first & second holder.

As per agreement First Holder is getting the rental income in their Individual Bank Account

How the rental income should be considered for taxation purpose?

Is it as per the Rental Agreement both owners should be taxed as per their ownership holding ?or
It should be who receives income in their bank account
or
It doesn't matter who receives the income but either of the Joint property holders can show in their Income tax return ?

Appreciate you help.

Thanks,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 August 2024 It's as per the Rental Agreement both owners should be taxed as per their ownership holding.

D M

D M (Querist)
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07 August 2024 Thanks for your reply sir.

But just want to check as per the Rental Agreement if Holder 2 shows the rental income in their income tax return as it helps to reduce tax burden on Holder 1 is it possible?

Thanks,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 August 2024 Not possible go as per ownership and rental agreement.

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