22 October 2010
X has purchased house property on 1/4/09 jointly in his name and his father Y and his mother Z. All invested the funds equally.
Y, his father gifted his share 1/3 to son X on 2/4/09.
Z, his mother gifted her share 1/3 to son X on 1/10/09.
X got rent for April to September 2009 and same was shown in incometax return, 2/3 (his + father share). Gift has been confirmed byparents, but registration formalities are not complete. Can ITO say that as the registration is not done, the property remains in three names and rent
23 October 2010
Sir, In a judgement the punjab high court has held that registration is merely a formality and ownership is main criteria. Hence ITO cannot disallow the 2/3 rd rent claimed by son. But my view is to keep the property in three names which will save you the tax if the father and mother are in lower tax slabs.
CAclubindia
