co ownership

This query is : Resolved

nitin (Querist)
Follow

13 February 2010 if there are two co-owner of a property and if the property has two units. one unit owned by each co-owner. they let out the property. if actual rent is given seperately for both the units & both the unit is let out. then whether the income derived for each unit should be aggregated and distributed among both the owner or income the income should be considered indivisually for both of them as per the income from their respective unit?

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
Follow

13 February 2010 Since they are joint owners you have club two units rent and arrive at the taxable inocme for property as a whole then divide for the two persons in their sharing ratio.

Message likes : 1 times

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
Follow

13 February 2010 Although section 26 says about co-ownership that INCOME SHOULD BE SEPARATELY CONSIDERED IN THE HANDS OF ALL CO-OWNERS,HOWEVER YOU CAN ALSO DO COMPUTATION IN AGGREGATE AND AFTER THAT DISTRIBUTE TO CO-OWNERS IN THERE RESPECTIVE SHARES.

But, here you said that separate rent is receiving by both co-owners means rent could be different for both units. Hence, in this case you will have to do separete computation in the hands of both co-owners according to section 26.

However, if rent is similar for both units then you can go for aggregate computation and after that IFHP will be distributed in their respective shares.

But, i suggest that you should go for separate computation.

Regards!!!
Dinesh S. Adhikari

Upgrade to CAclubindia Pro. Subscribe Now!