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Jointly-owned flat rented out by wife: can she claim full rent income?

Mihir

Mihir Tanna  |961 Answers  |Ask -

Tax Expert - Answered on Sep 10, 2024

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
sandeep Question by sandeep on Aug 01, 2024Hindi
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If i have a flat jointly in my name and my wife name. there is no loan on the property. Can my wife file the rent from property in her income tax as she is taking the whole rent and rent agreement is also in her name.

Ans: In case of Joint ownership, person who makes contribution in the purchase consideration will be considered as owner of property for income tax.

Thus, if you have made contribution at the time of purchase of property and/or in loan repayment; rent income will also be taxable in your hand in the proportion of contribution.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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My mother had a flat in Delhi which she wants to sell and give me the money to buy a flat in Bangalore. The Delhi flat will sell for approximately 1 crore and the Bangalore flat will cost about 2 crore- for which i will take loan. I wanted to know if i want to avoid paying tax on money received from Delhi flat, should i buy the Bangalore flat in joint name with my mother? If yes- will she have to be main owner, or can i be the main owner with she being co-owner?
Ans: If you're looking to avoid paying tax on the money received from selling the Delhi flat, purchasing the Bangalore flat jointly with your mother could be a viable option. However, there are some considerations to keep in mind:

Ownership Structure: You have the flexibility to choose the ownership structure based on your preferences and tax implications. Both you and your mother can be joint owners of the Bangalore flat, with either of you being the main owner or co-owner.
Tax Implications: When selling a property, capital gains tax may apply on the profit earned from the sale. However, under Section 54 of the Income Tax Act, if the proceeds from selling the Delhi flat are reinvested in purchasing a residential property in India within a specified time frame, you may be eligible for capital gains tax exemption. The exemption is available if the new property is purchased either in your name or jointly with others.
Joint Ownership: Joint ownership of the Bangalore flat with your mother can offer several benefits, including shared responsibility for loan repayment, potential tax advantages, and succession planning. However, it's essential to understand the legal and financial implications of joint ownership, including rights, responsibilities, and potential disputes.
Consultation with Experts: Before making any decisions, it's advisable to consult with a tax advisor or a real estate lawyer who can provide personalized guidance based on your specific circumstances and goals. They can help you navigate the tax implications, ownership structure, and legal considerations associated with the property transaction.
By seeking professional advice and exploring the option of joint ownership with your mother, you can make an informed decision that aligns with your financial objectives and helps minimize tax liabilities effectively.

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Radheshyam

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Hi Sir, I am tensed as JEE Main Examination is approaching and i am scared that i would only be able to score 100/300 at best. Please suggest me some good regional colleges. I am female single girl child in Delhi. Engineering was never my first priority yet I chose it because it seemed a safe option. I would also try and give CUET. One more concern is that my 5th subject in class 12 is GST or Geospatial Technology. Is there any scope for this subject through which I can enter a decent college. I dont want to spend my parents money..Please help. I am distressed
Ans: Hello Shaamhavi
First I would like to say that without any fear in mind and a predetermined score, you appear for JEE 2025 in 1st session. To improve your score/performance, you have 2nd attempt also.
You said, engineering was never your 1st priority. Then, why not have discussed this fact with your parents or parents have forced you to go for engineering? It is not clear from your question. How you can say, it is a safe option is also not clear.
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If satisfied, please like and follow me.
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