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Amit Rajain
My father owns a property which rents to Rs. 1,50,000 per month (Rs. 18 lakhs per year). For the purpose of saving the tax, he is thinking to divide the rent agreement among 3 people (my father, my mother, my brother), which makes an income of Rs. 6 lakh to each of them, which would reduce the income tax heavily.
But I asked one of my friend about this, and he said that the rental income can only be counted in the owner's income and no one else. It would be illegal to divide this income among family members, if the property is in the name of only one person, no matter even if the rent agreement is made with all 3 of them.
Could someone please confirm if is it illegal to do so? If yes, what could be the other way to save tax here? (My friend suggested to share the ownership of property with all 3 of them and there is no other way.)
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Your friend have suggested in right way. Rental income earned is taxable in the hands of each co-owner, in proportion to the share owned.
A person acquiring property by satisfying the conditions of section 53A of the Transfer of Property Act, will be treated as deemed owner (although he may not be the registered owner). Section 53A of said Act prescribes following conditions: (a) There must be an agreement in writing. (b) The purchase consideration is paid or the purchaser is willing to pay it. (c) Purchaser has taken the possession of the property in pursuance of the agreement. For more info visit our website @www.tarunguptaca.com and book appointment.
Thank you so much for you reply. Really helpful and I appreciate it.
CA Roomi Gupta 9 Feb 2022Your welcome Amit ji
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Aashu Raj
If I invest my 70 percent of salary in stock it is taxable
Salary received will be taxable but investment in stock is not taxable . For more info visit our website @ www.tarunguptaca.com and book appointment.
Dear Aashu,
Investment is not taxable however if you earn from sale of shares it will be taxable as LTCG/STCG depending on holding period. As far as salary is concern it will be taxable as per SLab. For further consultation you can reach us on ca.rahuldwivedi@gmail.com or 9004485377
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Selwyn Pires
Hi,
I recently purchased a third house property in Mumbai. While the first was purchased in my sole name, the 2nd and 3rd are with my family members. My name is first in all 3 properties.
I understand that only 2 properties are allowed to be self occupied and the 3rd will be treated as deemed let out and taxed. Please confirm.
How can I reduce my tax liability?
If I sell one and invest in another under construction property, would I still pay taxes?
With effect from Assessment Year 2020-21, a person can claim two properties, if not let out, as self-occupied and offer tax on the remaining houses declaring as deemed to be let out. For more visit our website @ www.tarunguptaca.com and book appointment.
CA Deepika Boyina 19 Feb 2022Yes
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Vaibhev
Can my father gift money to my HUF
My age is 40 years and i am self dependent
Gifts received by HUF from its members are exempted from Income Tax under Section 56(2)(vii) of the act. As per Hindu law, HUF is inclusive of all family members from a common ancestor, hence the limit of 50,000/- does not apply on HUF, excluding cash gift of more than Rs 50,000/-. For more info visit our website @ www.tarunguptaca.com and book appointment.
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Avis
Bought a flat in 2021 under construction link plan. Since the property was above 50 lacs had to paid TDS with every demand. For one demand the 1% TDS payment by buyer was delayed from my side. So I paid the 1% TDS along with the penalty demanded by IT Dept. Now the builder is also levying penalty on this 1% TDS amount ! Is it correct or legal for builder to apply penalty on TDS amount ? Is it not between the Buyer and IT Dept, and the penalty for delayed TDS should be paid to IT dept and not to both builder and IT Dept. Please advise
As per section 194-IA it is the duty of a purchaser who is paying to a resident seller to deduct tax at the rate of 1% of the consideration payable. Show 26 QB to builder if it is already deposited by you along with penalty. For more info visit our website @ www.tarunguptaca.com and book appointment.
