Income from property.

This query is : Resolved 

11 July 2011 I own a property which is rented out. The rental income is added to my income and taxed.

This property is in the joint names of self and spouse. It is a freehold with no loans.

My query is...

Can I gift this property to my wife?
The rental income will then be a part of her income. She is a homemaker.

My tax liabilities will reduce..Can tis be done?

Regards,

Subbaiah

11 July 2011 obviously it would be done, but this will give you no relief ultimate if you transfer the property without consideration, clubbing provisions will be initiated and you will face same situation after that.

right now, as she is joint holder, issue rent receipts in her capacity and receive rent, use to pay taxes and normal maintanace to property through her bank account (not cash), and claim it as HP income in her file, this will reduce your tax burden.

Remember that after this, you dont have to spend any amount direct or indirect way towards house property maintanance or development ( minor)

11 July 2011 Thank you Sharma.

But as she has not contributed towards the initial funds for the property, can she still claim rentals?

What is clubbing provisions? Will she not be entitled to income from rental on her gifted property?

Regards,

Subbaiah


11 July 2011 you can make an simple agreement that

due to love and affection, and your busy schedule for your own profession, you disvest your claim on rent received on property ( mention property details) and would not claim it in future,

However this will not pass on the ownership rights to her.


this entitle her to receive rent and maintain property, and get the funds used for herself,

clubbing provisions means the whole amount would get clubbed to your tax file and would be taxed accordingly.

11 July 2011 May be the idea work.



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