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Tax on house rent

12 February 2020

Dear members

The rental income from a house property that is in the name of wife is being deposited in husband account. It was husband who had invested in construction of the house (plot is in name of wife) and is managing the house/rental activities.

Question: is it ok for husband to show the rental income as his income and use it for tax filing. OR, the wife (who is the legal owner) will have to show income in her account.

If not allowed, what are the best ways for the husband to show the rental income s his own.

Transfer of property will attract stamp duty, and could be a costly.

Thanks.

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6 Replies

RAJA P M ("Do the Right Thing...!!!") (128106 Points)
Replied 12 February 2020

As per Your query.,

No way for compute the Income in Husband's name. Wife is only shown the income her return..

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rama krishnan (12244 Points)
Replied 12 February 2020

Since all the considerations towards purchase /consideration had been paid by you, the income generated out of such house property should be charged to tax normally in your hands only (clubbing provisions will apply) so there's no bar. you can show the rental income in your hands and pay tax accordingly

RAJA P M ("Do the Right Thing...!!!") (128106 Points)
Replied 12 February 2020

Can You give with details Mr Ramakrishnan...?!

How is possible other than landlord?

rama krishnan (12244 Points)
Replied 12 February 2020

@ mr. raja though the owner of the property is wife, all the considerations had been made by the husband which is nothing but the diversion of income to avoid tax incidence. so as per the clubbing provisions, the income generated out of the house property should be taxed in the hands of husband. moreover it seems from the query that the wife doesn't have any sources of income. then obviously the income from the house property has to be clubbed in the hands of husband .this is my view. correct me if I'm wrong...

RAJA P M ("Do the Right Thing...!!!") (128106 Points)
Replied 12 February 2020

@ Mr Ramakrishnan Sir.,

Thanks for the Clarification...

What about Your view in the following

"It was husband who had invested in construction of the house (plot is in name of wife) and is managing the house/rental activities"

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rama krishnan (12244 Points)
Replied 12 February 2020

@ raja sir... generally during the course of assessment proceedings, when wife doesn't have any sources of income, whatever assets bought in the name of wife, we presume that it's out of husbands income and whatever income generated out of such assets will be clubbed with husbands total income. here again it's to be presumed that the plot also bought out of husband's income and the income out of the plot also to be clubbed in the hands of husband.
different views will be highly appreciated for enlightenment Mr. raja

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