Last Chance: Get 10% OFF on CAclubindia Pro Subscriptions. Subscribe Now!

Income tax saving on rented property

476 views 3 replies

MJoseph

Lead

32 Points Posted on 15 November 2013

My father , a retired Govt employee owned a commercial property ready for renting out.

What could be the advisable means to save the Tax ( for eg expeceting a a rent of 1lakh per month).

Is it possible to split up the income to his wife and two sons , but the building is in the name of my Father. Or there are any other means .

The splitting up of rented income is possible legally? ( investment done by both the sons)

Replies (3)

ranjithsingh

Chartered Accountant

153 Points Posted on 15 November 2013

Dear sir, The only way to save tax on house property income is that 30% flat deduction on NAV and interest on borrowings (borrowed for the construction or renewal of the building) If u split ip the income to ur relatives then section 60 will apply.which says the clubbing of other person's income in the hands of the assessee ..

Mihir

Wealth Manager

5293 Points Posted on 15 November 2013

Service tax will also apply since the annual rent is over 10 lacs. You can avail 30% deduction. And the person who will pay rent will have to deduct TDS at 10% from rental invoice.

kanagaraj

CHARTERED ACCOUNTANT

793 Points Posted on 17 November 2013

is it iherited or self acquired by your father?.if it is inherited the shares may by divided intofamily members as a joint property, otherwise it is fully taxable in your father's hand after the standard deduction.