Tax implication of rental income from jointly owned property after co-owners death - succession not

Tax queries 41 views 1 replies

Hello,
I seek guidance on the income tax treatment of rental income in the following situation:

I co-own a residential property with my son — both of us have 50% ownership as per the registered sale deed. Unfortunately, my son passed away recently. I am also his legal heir and there are no other claimants to the property. However, the property is still in joint name, and the legal transfer/mutation of his share to me has not yet been completed.

Despite this, I continue to receive 100% of the rental income from the tenant.

In this case, I would like to know:

  1. Should I report only my 50% share of rent in my Income Tax Return for this financial year?

  2. Can I declare 100% of the rental income in my ITR with a self-declaration, given that I am the legal heir and rent is being received fully?

  3. Is there any issue from the income tax department if legal ownership (title transfer) is still pending, even though I am the legal heir?

  4. Would it be advisable to add a note or supporting declaration while filing the return?

I want to ensure correct reporting while avoiding future scrutiny.
Thank you for your advice.

Replies (1)

Income Tax Treatment of Rental Income Given your situation, let's break down the income tax implications of the rental income from the co-owned property.

Reporting Rental Income - *50% Share*: As a co-owner with 50% ownership, you can report your share of the rental income (50%) in your Income Tax Return (ITR). -

*100% Rental Income*: You can also declare 100% of the rental income in your ITR, considering you are receiving the entire amount and are the legal heir to your son's share.

However, this might require additional documentation and clarification.

Legal Ownership and Tax Implications - *Pending Title Transfer*: The pending title transfer due to your son's passing might not directly impact the tax treatment of the rental income.

As the legal heir, you can claim the income, but it's essential to maintain records and documentation to support your claim.

Declaration and Supporting Documents - *Self-Declaration*: If you decide to declare 100% of the rental income, it's advisable to include a self-declaration or a note explaining the situation, including the co-ownership, your son's passing, and your status as the legal heir. -

*Documentation*: Keep records of the rental agreements, bank statements, and any correspondence with the tenant or authorities to support your claim. Tax Department's Perspective - 

 

*Scrutiny*: If the legal ownership transfer is pending, there might be potential scrutiny from the income tax department.

 However, if you maintain proper documentation and declare the income accurately, you can address any concerns that arise.

*Accurate Reporting*: Ensure accurate reporting of the rental income and maintain supporting documentation to avoid future scrutiny 


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