Parking charges - validity

Tax planning 490 views 3 replies

atul

student

31 Points Joined April 2010

Hi all,

I have a query relating to Collection of Parking Charges. For example, suppose a person owns a land and collects rent on the shop builtup on his land. Further, he collects parking charges for vehicles in the name of his son. Both the sums are not liable to TDS u/s 194I as it doesnot exceeds the limits. Now, my query is whether the son can offer the parking charges collected in his income tax return or will it be clubbed in his fathers income as the property is owed by his father???... Can we do anything on offering such income in hands of his son by way of an agreement or something?.. Plz needed ur expertise...

Replies (3)

Mihir

Wealth Manager

5293 Points Joined December 2008

If the property is owned by the father, any income arising or accruing from the property shall be his income and to be shown in his own ITR.

Max Payne

employed

2574 Points Joined May 2008

Hi Atul, in addition to what Mihir has said correctly, my suggestion would be to consider the possibility of leasing the land to son, and offering the income from parking charges as income from other sources in the hands of the son. In such a case, all expenditures can be claimed as deduction in computing income under this head.

Please note, there is no fair rent concept in computing income from other sources. So the father may also show the income from lease of LAND as IFOS, showing the rent paid by son as the income against which he can also claim all expenses incidental to such lease.

This appears to be a workable structure, but the facts should point to the genuineness of the transaction.

Sai Mohan

Mr.

44 Points Joined August 2013

I think this situation is covered under composite rent from house property. If the contact is separable, the collection from parking to be grouped under PGBP and rent under house property.