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Tax Implications: When Dad Leases Property to Son at Zero Rent?

Mihir Tanna |990 Answers |Ask -Follow

Tax Expert - Answered on Jan 20, 2025

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more

Question by RAJINDER on Jan 08, 2025Hindi

father gives his commercial property to son on zero rent lease agreement, further son sublet the same property on rent and keeps money in his account. can the son disclose this income in his itr and will the income tax department ask the father to pay tax on said income as he owns the property.

Ans: As property is transferred by father to son with proper agreement, rental income is likely to be taxable in the hands of son.

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My father gifted a home to me and my brother in the name of registration and remaining (other brothers are also included). A few years ago, I was involved in share markets and mutual funds investment and banking asked me to submit an ITR file. So I am very worried about my situation. Shall I show it in my tax property (gift tax)? Kindly clarify my doubt.

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