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Clubbing or s27(i)?

sivabommakanti (CA - Tax Consultant) (267 Points)

05 May 2017

if husband transfers his house without consideration to wife who in inturn transfers to her son in whose hands will rent be taxable? and under which section?

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13 Replies

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 05 May 2017

In the hands of husband as per sec 64 but i dont know the subclause

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 05 May 2017

If house is transferred to son without consideration then rent is taxable in hands of husband.

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sivabommakanti (CA - Tax Consultant) (267 Points)
Replied 05 May 2017

y wont 27(i) apply when the husband transfers to wife w/o consideration in the first instance?

sagar parakh (Group 2 Cleared) (317 Points)
Replied 05 May 2017

Sec 27 shall apply in case of house property..that is Husband shall be considered deemed owner of such property and accrual of rent income shall be clubbed in his hands.

sivabommakanti (CA - Tax Consultant) (267 Points)
Replied 05 May 2017

ICAI answered the question in PM applying sec 64 and the answer is income is taxable in the hands of son and not the father. idk how?!

CA Sumit Ramesh Bharadia (Practicing Chartered Accountant) (625 Points)
Replied 05 May 2017

As per Section 64(1)(iv) Income from assets transferred directly or indirectly to the spouse without adequate consideration is Chargeable to Individual transferring the asset. Also As per Section 27(i) If an individual transfers any house property to his or her spouse/ minor child otherwise than for adequate consideration, the transferor in that case is deemed to be the owner of the house property so transferred. As you can see, the act nowhere taxes Income from House Property Transferred to Major Son without consideration in hands of transferor. Hence in your question, the Income is taxable in hands of son.

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 05 May 2017

Income is taxable in hands of son if he is major or in hands husband if he is minor. It depends on the majority of son.

Gift given to major son doesn'

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