Rental Income to joint owners

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A daughter who jointly owns a flat with her mother, and has been managing the loan and claiming rental income, wishes to gift the future rental income to her mother. The discussion clarifies that rental income should typically be divided according to ownership percentages as per the purchase agreement or investment. If the sale deed doesn't specify, a 50:50 split is assumed. The daughter's past tax returns claiming loan benefits and rental income will need to be considered in light of this change.

subash vishwanathan

subash vishwanathan (Querist)
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28 September 2021 Daughter and mother jointly purchased a flat. Mother being a housewife, daughter has undertaken to clear off the loan and shown the rental income till date. Now that the flat is free from loan and daughter wants to gift the rental income to her mother. Can she ask the tenant to pay the rent to her mother's name? if so, what is the status of daughter's IT return so far she claimed rental income and loan benefits?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2021 The rent should be divided as per the percentage of ownership of the flat; which can be decided upon the purchase agreement or the amount of investment of each joint owner.

subash vishwanathan

subash vishwanathan (Querist)
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28 September 2021 Though mother is joint owner, she is not an income earner and the entire flat price is born by daughter's income and loan. Also there is no mention of rental income sharing on the sale deed.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2021 If there is no clarification of ownership percentage in sale deed, you can consider it as 50:50 ratio, and accordingly share the rent income equally.

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