I purchased a property jointly with my son. However, all money towards purchase was paid by me. As i have invested full amount, I am getting rent in my name. While filing ITR, coowner name is being asked alongwith his PAN details etc. How to show the rental income in ITR. My son has not received any rental income.

Ans: If both of you are the co-owners and if the rent is being received in your respective bank accounts, you can file ITR-1 for each showing income from house property.

 

Ans: You can bifurcate the rental income into the ratio of ownership ( yourself and your spouse). The very purpose of providing AIS to tax payers is that , they may report errors if any to the department and it can be rectified. you can report the error, if any through Compliance portal.

Ans: You have raised a valid and practical query. Many families manage loans and incomes together like this. So let's understand what works, what doesn’t, and how to structure it properly.

Property Ownership vs Loan Co-Borrower
Your mother is a co-borrower, but not a co-owner in the property right now.

That means she is liable to repay loan, but not entitled to tax benefits.

Only owners can claim home loan benefits under Income Tax Act.

You are the sole legal owner, so full tax benefits belong to you.

Co-borrower tag only matters for bank repayment, not for income tax deduction.

If your mother is not an owner, she cannot show rental income either.

Ownership must be legally transferred to share tax liability and income.

Tax Benefits on Home Loan – Who Can Claim?
Only owners can claim Section 80C benefit for principal repayment.

Only owners can claim Section 24(b) for interest deduction.

Even if your mother repays some part, she cannot claim tax deduction.

Since you pay EMIs and are the owner, you can claim full deductions.

Prepayments by your mother do not give her any tax benefit unless she owns.

So if she pays prepayments, it is considered a contribution or gift to you.

This can be tax neutral as gift from mother to son is tax free.

But if she wants to claim rental income or loan tax benefit, she must become owner.

Gifting Property Share to Mother – Is it Allowed?
Yes, you can gift a portion of property to your mother.

It must be done using a registered gift deed on stamp paper.

Gift to mother is exempt from income tax under the law.

You can gift 50% or any suitable percentage as per your decision.

Once gifted and registered, your mother becomes legal co-owner.

This allows her to show rental income in her ITR proportionately.

Also, she can claim home loan benefit only if she pays from her account.

So she can now claim Section 80C principal benefit for her prepayments.

But interest deduction under Section 24(b) is only for EMI payers.

Since you pay EMI, you will continue to get full interest deduction.

Rental Income in Mother’s ITR – Can It Be Done?
If she becomes co-owner through gift deed, yes – rental income can be shown by her.

But only her share of ownership can be shown in her ITR.

If you gift her 50% of the property, she can show 50% rental income.

This can help if her tax slab is lower than yours.

Ensure rental is credited in joint account or split to reflect ownership.

Keep rent agreement and receipts well documented to avoid issues later.

If rent is deposited only in your account, it becomes hard to prove it’s her income.

Tax department can ask for proof during scrutiny.

Keep trail of ownership, gift deed, rent receipts, and tax filing copies.

Can You Still Claim Full Home Loan Tax Benefits?
Yes, you can claim 100% of interest deduction under Section 24(b).

You are paying full EMI, so interest portion is fully yours to claim.

Your mother can now claim principal deduction under Section 80C.

But only up to the amount she pays from her bank account.

Make sure she transfers prepayment directly to the loan account.

Maintain a written note stating that you both share the repayment as per agreement.

This becomes part of your documentation if asked during tax scrutiny.

Avoid cash payments or unclear transfers for loan prepayment.

Things to Take Care Legally and Practically
Execute a gift deed through a lawyer and register it at sub-registrar office.

Mention share of ownership clearly – 50%, 30%, 40% – as per your decision.

Inform the bank about ownership change to avoid issues during resale.

Get bank’s consent if property is mortgaged – some banks need NOC.

Update property card or mutation entry if required in your state records.

If EMI is fully yours, you continue to enjoy Section 24(b) benefit.

If mother pays yearly principal, she can claim Section 80C.

Rental income can now be split and shown in respective ITRs.

Keep gift deed, payment proofs, rent receipts and home loan statements safely.

Long-Term Impact on Family and Tax Planning
This setup can help reduce total family tax outgo.

Your mother may fall in lower slab or not be taxable at all.

So shifting rental income to her can save overall tax.

Also, she can start investing rental income in her own name.

This avoids clubbing of income and brings tax efficiency.

But ensure you do not misuse this – intent must be clear and documented.

Gift to parents is tax-free. But rental income becomes their taxable income.

Income tax department may ask for source trail if mismatches occur.

File both ITRs clearly reflecting ownership and income details.

Why Avoid Real Estate as Investment
Many think property is best for rental income. But it is illiquid.

Real estate has high entry and exit costs like stamp duty, brokerage, and taxes.

Rental yield is often low, 2%-3%, while mutual funds offer better post-tax returns.

Also, property maintenance, tenant issues, legal risks are often ignored.

So never rely fully on real estate for wealth creation.

Finally
Your plan of adding your mother as co-owner is good.

Gift deed is the right legal method. Register it properly.

She can then show rental income and claim principal tax benefit.

You can still enjoy full interest tax benefit.

Do everything with proper paperwork and clarity.

This way, both of you save tax and keep peace in the family.

Plan all steps with care. Reap full benefits with zero confusion later.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: » Tax Treatment

You can show the rental income in your ITR, but ownership is important.

Since the property is jointly owned, your son is legally a co-owner. The tax treatment depends on the actual ownership share mentioned in the registered purchase deed.

» If You Own 100% Beneficial Interest

If the purchase deed clearly establishes that your son is only a name-lender, the position needs careful legal review.

Simply paying the entire purchase amount does not automatically make you the sole owner for income-tax purposes.

» If Ownership Is 50:50

If the registered deed shows 50% ownership for each person, rental income is normally considered in that ownership ratio.

Your son would generally need to report his share of rental income.

The fact that rent was credited only to your account does not by itself change ownership.

» Your Situation Needs Attention

You mentioned that you paid the entire purchase amount.

Therefore, the source of funds and ownership structure should be properly documented.

There could also be implications under the Income-tax Act if the beneficial ownership differs from the registered ownership.

I suggest getting the purchase deed and rent agreement reviewed before filing the ITR.

Do not simply report 100% rental income in your return only because rent comes to your bank account.

» Practical Approach

Keep these documents ready:

– Registered sale deed showing ownership shares
– Bank statements showing the purchase payment
– Rent agreement
– Bank statement showing rent receipts
– Property tax receipts
– Any written understanding regarding ownership and funding

Your CA can then determine the correct rental-income reporting based on the deed and facts.

» Final Insights

Your payment of the full purchase amount is an important fact.

However, the registered ownership percentage is equally important.

It is better to resolve this before filing the ITR. This can avoid future tax notices and ownership disputes.

Best Regards,

K. Ramalingam, MBA, CFP,

AMFI-Registered MFD – ARN 4188

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/