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Taxability of rental income in case of Joint Ownership

Yash. (Final CA Student) (76 Points)

26 August 2017

Please help me with my query, the facts of the case is as below:

Mr. A have incurred all the cost for purchasing a House Property. The Agreement for purchasing the said House Property was executed by Mr A in the name of his Wife (Mrs. B) and his major Son (Mr. C) jointly. In the Agreement, there is no mentioning of the share of the Wife and Son.

Now in whose hands, the rental income from the House property shall be taxed i.e. Mr.A, Mrs B or Mr C ?

The Agreement is executed in the Year 2011 while the rental income have started arising from the Year 2017.

Please advise considering the provisions of Income Tax Act especially with respect to Sec 26 and Sec 27.

Also whether it is possible now to define the share of the joint owners in the agreement ?

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3 Replies

rama krishnan (12234 Points)
Replied 26 August 2017

who are all the co-owners of the property? if their share is not definite then it's presumed that they have equal share in the property. compute the income from house property. then apportion the house property income according to their % of share or equally. interest on borrowed capital can be claimed by the co-owners to the maximum limit by the each co-owners

Yash. (Final CA Student) (76 Points)
Replied 27 August 2017

Hi Rama, Thanks for your reply. Mr. B and Mr. C are the co-owners. As per Sec 26, the income can be taxable as co-owners only if the share of the ornwership is definite. Can you please confirm whether equal share of ownership can be presumed in case there is no mentioning of the share in the Agreement ?