Hello ! Myself Chatterjee (47 yrs). My CTC is arround 10 lacs & I am staying in a rental accommodation in Jamshedpur for which I am paying 12000 rent per month plus 2000 sociey maint charges. Since my landlord not giving his PAN or AADHAR i never claim the rent for tax savings. Recently I have purchased one studio apartment (775 sqft) in Kolkata for my daughter's name (11 yrs) jointly with my name since she is minor. I hv purchased this frm my PPF investment & bal from MF investment. In May'19 I hv rented out the studio apt in fully furnished condition @ 18500 pm rent + 2800 pm maint charges = 21300 per month the tenant deposited to my account. Now she is asking for my PAN NO. for HRA claim. My question is : 1. If I give her my PAN details, is the rental income reflect to my income BY DEFAULT or I hv to fill up during return file? 2. How much Tax to be pay extra for this rental income @ my CTC is 10 lacs (1.5 lacs save u/s 80C & 10060 /- save u/s 80D) 3. Though the rental agreement is prepared by my name, but the flat is purchased for my minor daughter jointly with me. Can I give the tenant my daughter's PAN No. for HRA Claim at her end. Is it reflect to my income ??? 4. Can I made the rental agreement with my minor daughter's name & her PAN & Account details will be given to the tenant. Please advice all above. Regards,
It wont reflect automatically you'll have to show it in your return of income.
If you haven't taken any loan on it you will have to pay around 31000 extra tax.
Since she is a minor even if you give her PAN such income will be clubbed in your hands.
It wont help.
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Thank you.
Hi
- Yes, rental income will be chargeable to tax in your hands. Extra tax will be around 56k. You need to fill the details in the ITR, it will not reflect by default. As your daughter is minor, she is not capable to enter into any contract therefore entire income will be taxable in your hands only.
Thanks
Dear Sir,
Hope you are doing well !!
1. You have to fill the data in your return.
2.You will have to pay 20% extra tax on rental income as you are falling under 20% slab.
3 & 4..As per provisions of Section 64 of the Income Tax Act, income of a minor child is taxable / clubbed in the hands of the parents whose total income (before including income of minor) is higher.
So, the said arrangements will not be helpful to you.
Thanks all of you.... My next question is : 1. If I give my PAN details to the tenant & DONT SHOW the same in my return file (ITR)....then what happend?? If I will provided the tenant my minor daughters account number....then it should not reflect to my savings account..... 2. Tenant is giving me 18500+2800 = 21300, 2800/- I have paid to Society for maint charges. How much amount will be consider as rent. And while the room is fully furnuihed , is there any provision to get some relaxation from tax. 3. How can I save this tax???
If you give your PAN and dont show it anywhere then there are chances that you might receive a notice from income tax and if that happens you will have to pay tax as well as penalty.
Even if you give your minor daughters PAN then also you can receive a notice since your daughter is a minor so as a parent who is earning you might be liable to pay tax on same by including it in your income.
No deduction for furnished house.
You need to consider rent as 18500 but it would be better if you ask tenant to directly pay maint charges so that same is not reflected in your bank account.
If you would have purchased house on loan or on your wifes name you would have saved some tax but now there is no chance of saving tax legally.
Thank you.
Hi Chatterjee Ji,
1. yes rental income reflects by default in prefill income tax form.
2. you have to pay 30% tax on 70% of rental income ( as 30 % is standard deduction)
3. you can take rent in daughters name , but this will clubbed in your income always
4. already answered in 3 above.
one more thing in your rented house case if your landlord denied to provide his/her PAN then also you can claim upto 1 laksh as HRA claim( up to 1 Lakhs no PAN required).
1.Where the annual rent paid is more than Rs 1,00,000 per annum – It is mandatory for tenant to report the PAN of the landlord to the IT Department to claim HRA exemption. You tenant must be reporting the same for HRA exemption. So, you may get the notice on the basis of tenant information.
2. There is no special deduction for full furnished house. The rent amount would be considered Rs 18500/
3. If you have any home loan then you can claim interest deduction.
Otherwise, there is no way.
For HRA of above Rs. 1, 00, 000 a year will be required to submit their landlord's PAN details. You should have partly claimed HRA benefit by reflecting rental amout less tha n 1 lac. Hence PAN would not been required.
Now as regards future, the answers are as follows :
234300 (21300 *11 ) – Municipal tax (say 10,000) – 30% of the amount ie 67290 = Taxable rental income 157,010.
Pay 20% tax on above.
This amount will be taxable in your tax return.
Hello,
1. It won't reflect by default, you will have to declare it in your return.
2. Tax on rent would be at 20% since after deduction you are in 20% slab, approx Rs. 32K.
3. Even if you give your daughter's PAN, it would be taxable in your hands because of clubbing provisions.
4. Won't be beneficial for you.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
You might get a notice from the department on the basis of your tenant's information.
Rent would be Rs. 18,500.
Hi
1.You have to declare it in your return,it will not reflect by default.Since its bank transferred rental income,you may get notice for the same from IT department.
2.It will be taxable @ 20%,as you are in 20% slab
3.Since she is minor,clubbing provision will apply and it will be included in your Income only.
Minor accounts are always linked with Guardian account ,so it will be taxable in your hands only.
-18500 is taxable rent income.
Hope it helps
Hi
1. You have to file the details during ITR filling.
2. It would be around 38000.
3. Any income of your minor daughter shall be clubbed in your hands.
4. That won't be of any help.
It is advisable to show correct income in your ITR and file taxes on the same.
In case you have a home loan, you can claim deduction of interest paid.