Query regarding section 27 and clubbing provisions

Tax queries 3538 views 8 replies

Ankur

252 Points Joined March 2011

hello friends,

please somebody clarify my doubts which is as follows:

.Suppose a father transfers his house to his major son without any consideration for ever and his son let it out to a tenant for Rs. 10000 p.m. and son keeps the entire income from the house.

1. Now can father in such circumstances be treated as deemed owner of the property under section 27( i am confused since in sec 27 only the transfer to spouse and minor child is mentioned and not the transfer to major child)??

2.and if he can't be treated as deemed owner will such transfer be treated as revocable transfer under section 61 or not and whether the clubbing provisions will apply or not here??? or will it be the son himself liable to tax on such income without any clubbing provisions being applied to the given situation???????

plz plz plz plz plz help

thanking in anticipation.

Replies (8)

varahi

STUDENT

2373 Points Joined May 2011

son himself liable on such income as asset transfered to son who s not minor..

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pooja

Job

111 Points Joined February 2011

it will be taxable in the hands of son because he is major

Tripti ( CA, MBA, CPA)

132 Points Joined March 2011

It taxable in the hands of major son...

Anjani Kumar

Manager

128 Points Joined June 2008

Mr.Ankur

The tax liability arises in the hands of son

Because the property transferred with consideration.

The consideration is " NATURAL LOVE AND AFFECTION "

if i am wrong plz explain

Sandeep Surana

Practicing Chartered Accountant

156 Points Joined November 2008

Q1 Ans. Firstly you understand with word minor child which means "A person who has not yet reached the legal age".

and "Section 27 applicable when residential house transfer to His/her Spoue or Minor child(not being a married), in such a case assessee(transfrer) shall be deemed to be Owner of such House Property, as result Income from such house property taxable as Deemed owner's Income."

hence, in your case father not treated as Deemed owner and Income from such Property is Taxable in Son's Income

Q2 Ans. this will not be treated as Revocable transfer because father not having any restriction or right in Ownership of such House Property

Because of son is Owner of such property therefor Income from such property is Taxable in "Income from House Property" head u/s 22