Sub let a property and save tax

Save Share

This query is : Open

Puneet (Querist)

13 March 2017 I have a query, can a father let his property to his son and son sublets it for commercial purpose to third party and this way both father and son save tax as total rental income gets divided between father and son, please suggest/give openion.

Many thanks,

Girish Aradhya

Girish Aradhya (Expert)

13 March 2017 Father can let out his property to son, which is income from H.P. sublet by son is allowed but treated as income from other sources.!!! no deductions allowed.

Puneet

Puneet (Querist)

13 March 2017 Thanks Girish, so basically your answer is yes, income and hence income tax will get divided.

Puneet

Puneet (Querist)

13 March 2017 Thanks Girish, so basically your answer is yes, income and hence income tax will get divided. Further, does it require that rental income charged by father (owner) to son ( lease) should be near market rates ( arms length )

Girish Aradhya

Girish Aradhya (Expert)

14 March 2017 The value shall be calculated as per IT act. First calculate a)Municipal value, b)fair rent c)std rent d)actual rent. Higher of a and b = x lower of x and c = y higher of y and d = annual calue.

Girish Aradhya

Girish Aradhya (Expert)

14 March 2017 * annual value... type error

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now