I have a house in my name. I am giving it on rent. I do not need further income in my file. Is it possible that:
1. I authorise someone else to collect the rent on my behalf by some kind of agreement. What kind of agreement can this be?
OR
2. I bifurcate the rent and receive a nominal income and someone else receives a major part of the rent under some pretext.
IF you transfer only the income to the second party then in that case you only have to pay the rent on the income as per the section 60 of income tax.
Sec61. Even if you tranfer the the asset and such asset is recoverable then also you need to pay the tax on income.
Sec 63 explains that the transfer is said to have been revocable if:
(a) It contains any provision for the retransfer (by transferee) directly or indirectly whole or
any part of income or assets to the transferor.For Instance- Assessee just before receiving Interest transferred debentures to his brother and immediately after receipt of the debenture interest by his brother reacquires them. In such a case the debenture interest will be clubbed in the hands of assessee .This is also the example of Bond washing transactions [Sec 94(1)]
BUT contract shoul be "transfer the asset to the other party and recoverable after his death" then it will not be included in the your total income and tax will be paid by him only.
if you just tranfer the income then you only have to pay the tax . .
CAclubindia
