FATEMA (CHARTERED ACCOUNTANT) (719 Points)
23 June 2010My client has purchased a flat jointly with his wife,both having equal share.The rent agrremnt is in the name of the client and he receives 100% rent.How do i show this in the ITR.Should i say 100% ownership and take the rent in the ITR of the client or say 50% ownership and offer half of the rent for tax?
Regards,
Fatema
CA Manoj Tilokani
(JOB)
(163 Points)
Replied 23 June 2010
IF THE PROPERTY IS REGISTERED BY THEM JOINTLY THEN YOU HAVE TO SHOW PROPORTIONATE INCOME. SO YOU HAVE TO SHOW ONLY 50%( AS IN YOUR CASE) IN YOUR CLIENT'S RETURN.
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 23 June 2010
Manoj,
you mean to say that the rent agreement does not make any difference.....rite?
CA Manoj Tilokani
(JOB)
(163 Points)
Replied 23 June 2010
YES. IF THEY ARE OWNER JOINTLY THEN INCOME SHOULD BE DIVIDED AGREEMENT IS JUST FOR RECEIVING RENT AND INCOME TAX ACT DOES NOT CONSIDER IT.
Akhil Gupta
(Manager F&A)
(856 Points)
Replied 23 June 2010
Agreed with Manoj. You have to show 50% income in your client return. The Balance 50% will be shown in return of wife if the provision of Clubbing doesnt attract.
PRATEEK
(ACA)
(102 Points)
Replied 27 June 2010
AS IT IS SPECIFIED IN THE SALE DEED THAT HOUSE PROPERTY IS HELD IN CO OWNERSHIP WITH EQUAL SHARE THEREFORE YOUR CLIENT WOULD BE ENTITLED TO 50% OF THE RENT AMOUNT .AS YOU HAVE FURTHER SPECIFIED THAT 100% OF THE RENT AMOUNT IS BEEN RECIEVED BY YOUR CLIENT THEN THIS SCENARIO WOULD FALL UNDER SECTION 60 OF THE INCOME TAX ACT i.e TRANSFER OF INCOME WITHOUT TRANSFER OF ASSET AND HERE THE AMOUNT WILL BE TAXABLE IN THE HANDS OF THE TRANSFEROR I.E YOUR CLIENT'S SPOUSE
SALIL
(PRACTICE)
(63 Points)
Replied 27 June 2010
henceforth the ask the client to sign the rent agreement jointly and receive the income seperately.If possible redraft the rent agrement now.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
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