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Rental Income split between father and son ?

27 July 2023

Can Rental income be split in between Father and Son if the Father is sole owner and received rent in Joint account with son? Agreement has been made and father transfers money to his son every year and son is not having much income.

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8 Replies

jagdish chhugani (engineer) (736 Points)
Replied 30 July 2023

No, if you have no share in rented property.

If property is in two or three names, then as per their share they can split, but rent should come in their account sepretly or if Any one getting rent in his account then he must transfer splited rent to others officially.

Ted Lapis (13 Points)
Replied 31 July 2023

What if son has executed the rental agreement with POA from father and also there is agreement made for sharing the rent 50-50 between father and son in lieu of a token given to father by son 10 years back to buy half property?

jagdish chhugani (engineer) (736 Points)
Replied 01 August 2023

If rent is more than 50000 per month tenant have to cut TDS , first check is tenant ready to pay in two names, if tenant getting HRA he will declare PAN of land lord.

Is father filling ITR ? What is taxable income , above 500K or less, Are you trying to save taxes.

What is purpose?

If you getting rent in joint account name father is first name, then any money he pay you to your another account. Will be loan or gift.

jagdish chhugani (engineer) (736 Points)
Replied 01 August 2023

Why not you be a co member In property if it is housing society, you just need gift dead from father pay stamp duty 200 and registration 200, get rent splited in two names.

But AIS will show rent received in first name if reported by tenant in his HRA declaration.

Ted Lapis (13 Points)
Replied 01 August 2023

Yes thanks for your reply, was wondering if there is any other provision to split rent other than co-owner,

son helped father get a good deal (fair market value) and has worked hard to get the deal for a year. Also he is taking care of his aged father 75 and not able to work.

Can he give the son a service charge. Father has TDS more than a lac. He wants to claim a refund and give his son some income. His son is jobless after COVID

Any idea what is 53a ? Can his son be a deemed co-owner since he had given 2 lacs to father 10 years back when he was working ?

with a gift deed From what date can he claim co-ownership?

jagdish chhugani (engineer) (736 Points)
Replied 01 August 2023

What is big deal if son give 2 lakhs to father, it is sons duty to take care parents financially, moraly, etc.

Read

https://blog.ipleaders.in/section-53a-of-transfer-of-property-act-an-analysis/#:~:text=of%20the%20property.-,Explanation%20of%20Section%2053A,the%20contract%20against%20the%20transferee.

Gift dead

Father to make gift dead for property where he can give full or part of share to one or more children , dead to be registered and stap duty paid.

Same to be given to housing society to get share certificate amended. .

Society will add names in share certificate.

This can take 2 to 3 months or more depend on your legal expert.

Ted Lapis (13 Points)
Replied 02 August 2023

Thanks but Gift deed would take a long time to execute and no savings on tax in previous fiscal. The family is ending up paying more tax than they should, with low income in sons name.

2 lacs were used for repairs of the property and maintenance so that it can be given for rent.

1-Can the father give his son a service charge to save the tax liability.

2-Can the 2 lac be considered as a property loan from son at 15% rate and repayment with interest after 10 years. as father has given son 5.5 lacs last fiscal.

Please advise how Father and son can save tax, since both father and son have also invested 1.5 lac (80C)