Rental income from a property not owned by the person

Tax queries 442 views 1 replies

Hello,

We have a property owned, self-earned by my father and still is undivided. Pars of it  will be rented out and will start receiving the rental income. So, in such case what are the legal and valid options in order to reduce tax to be paid by his children? 

My thoughts 

Option 1. Get the income in name of  father, he will file ITR. The income then will be distributed as parental income  to children on regular basis.

Options 2 : Get the rental income in names of daughter-in-laws (by doing Leave and lIcence agreement in their names) & file their ITRs.

Option 3 : Get rental income in names of children and file their ITRs.

So, are these options legally valid ? And what 

1. what would be best option out of above ones?

2. What would be tax liability in each case for all involved (father, sons, daughter-in-laws)?

3. In the future, plan is to do gift deed from father in name of their daughter-in-laws, then gift tax

BR

Anil K

Replies (1)
I think deeming fiction would be there if the rental income is shown in any name other than the owner as per the provisions of section 27 of Income Tax Act unless the property is transferred with payment of full consideration.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register