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House rent to spouse

08 June 2011

i am employed on contract basis and have a consolidated monthly salary of 50,000. it does not have any breakups(no basic, hra, ta, da etc.. just a lumpsum amount monthly).

i have a house which is wholly owned by my wife right from the beggining(she is a home-maker). how much(5000, 10000 ??) can i transfer every month as house rent to her saving acct by cheque so as to get the maximum IT exemption.????? she will show it as her income. thats not a problem.

thanks

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22 Replies

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 08 June 2011

Rent depends wher u stay ,wat is d rent in similar areas /ur surrounding area. etc

There are several factors tht decides d rent of any property including its use. so more details req for proper advise.

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last man standing (officer) (35 Points)
Replied 08 June 2011

rent for a house in the place where i stay is around 25000 pm. but i would like to keep it to the minimum that would be exempt.......... say max exemption is 1,00,000 p.a. ,, for that i will pay her 10,000 p.m. by cheque..... .

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 08 June 2011

BUT TDS ALSO NEEDS TO BE DEDUCTED IF LIMIT ALSO EXCEEDS U/S 194I.

last man standing (officer) (35 Points)
Replied 08 June 2011

sorry, but could be please elaborate ? Tax is already deducted at source for me.

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 08 June 2011

u need to deduct tax at source if it crosses d limit u/s194I b4 making payment to ur wife as rent.

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M. N. JHA (CA) (8316 Points)
Replied 08 June 2011

Not much knowledge reguarding this. . . . .but As per my opinion u may not get benifit for this because ur wife is owner of the property and if u still want to get deduction by paying rent then maximum limit is rs. 2000 Per month. . . . . . . . . . . This is my thinking for more info go to google search and type "section 80GG of income tax" and click on search and chekes that results

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 08 June 2011

Originally posted by : last man standing
	i am employed on contract basis and have a consolidated monthly salary of 50,000. it does not have any breakups(no basic, hra, ta, da etc.. just a lumpsum amount monthly). i have a house which is wholly owned by my wife right from the beggining(she is a home-maker). how much(5000, 10000 ??) can i transfer every month as house rent to her saving acct by cheque so as to get the maximum IT exemption.????? she will show it as her income. thats not a problem. thanks

your question itself is wrong...........

when its contract basis payment its professional income, not SALARY

you can transfer upto 2.5 Lacs towards rent, (2.5L Less 30% standard deduction =1.75 Lacs, which is below taxable limit)

No TDS as you are individual and your accounts are not audited under sec 44AB

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 08 June 2011

use banking transactions for rent payment, as in case of any litigation with department, it wil be totally disallowed in absence of bank entry

last man standing (officer) (35 Points)
Replied 08 June 2011

thank you for your response.

1. is tax on professional income same as that on salary ? the tax slabs etc ?

2. do i have to just submit the receipts/cheques of rent payment to wife or any other documents as well ??? what is the format of rent receipts ??

thanks

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 08 June 2011

Originally posted by : last man standing
	thank you for your response. 1. is tax on professional income same as that on salary ? the tax slabs etc ? 2. do i have to just submit the receipts/cheques of rent payment to wife or any other documents as well ??? what is the format of rent receipts ?? thanks

rent receipts are available at forms vendors ( stationary)

an agreement is to be made on stamp paper for rental, with portion alloted to you with monthly rental value.

Professional income is not salary, its income from business and profession, and ITR4 is to be filed.

for salary the payment terms are to be established as "employer and employee, and statuary employment contributions are to be paid by employer and employee both, viz Profession tax, PF, ESI etc.

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last man standing (officer) (35 Points)
Replied 08 June 2011

thank you. the rent part is clear....

regarding the payment terms, its a contractual agreement as far as i know... the employee pays a lumpsum amount each month..... there is no pf deduction, no prof tax(in my state), and esi wont apply i think.

thanks

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 08 June 2011

its professional contract, and hence its income from "profit and gains of business and profession" where ITR4 is to be filed.

last man standing (officer) (35 Points)
Replied 08 June 2011

thank you.... i went through the it dept website & it says my income would come under 194J. and possibly charged @ 10%. that would be a tax of 60,000 ??? that is more than what i would pay if it was salary ?

another point. 194J says professsional income is not taxable if gross sales/turnover is less than that specified in 44AB(rs 40 lac) . . . how can one calculate that ???

thanks