My wife and I are both co-owners and co-borrowers for a property under construction as of now.
Possession is expected in 3 months and I plan to rent out this property.
We expect to get 3,60,000/- as annual rent and 5,50,000/- as home loan EMI.
I am in 30% tax bracket so this additional rental income will increase my income tax outgo.
As my wife is not working, what if she gets the rental income (legally she is entitled to as she is co-owner and co-borrower)?
My total income tax liability will go down significantly.
My questions are:
1) Is this legal?
2) Does my wife needs to file income tax return in that case -- as her income will be 3,60,000/- per year.
3) Any other problems you see in this scenario?
4) Will I be able to claim tax deduction under section 24 (for house loan interest I am paying)
5) Can I show income to me from my house property as zero (as my wife gets all the rental income)?
CAclubindia
