Renting property to wife to sub let as fully furnished

• Your income: You rent the flat to your wife → you show that rent as Income from House Property.

• Wife’s income: Wife sublets furnished → she shows the sublet rent as her income (usually Income from Business).

• Wife’s deductions:

  • She can deduct the rent paid to you if it’s actually paid and reasonable/market-based.

  • She can deduct actual expenses for earning that income (repairs/maintenance, society charges if she pays, etc.).

  • Furniture purchase is generally capital (not simple expense); depreciation only.

• Documents to keep:

  • Rent agreement you → wife with subletting permission

  • Sublet agreement wife → tenant + inventory list for furniture

  • Bank proof of rent payments/receipts, bills for furniture/appliances, maintenance bills

  • TDS u/s 194-IB if wife pays you rent > ₹50,000/month (Form 26QC + 16C).

For detailed discussion or advice opt for a phone consultation anytime.

Happy to help further! 😊

1) Rental income received by husband would be taxable under the head "Income from house Property". Below deductions are available against rental income:

i) Standard deduction of 30%

ii) If there is any housing loan on such property then deduction of  interest upto Rs.2 lacs is available if you opt old regime taxation

2) Income from subletting would be taxable in the hands of wife under the head "Income from other sources". Rental amount paid to husband and other maintenance expenses is available as deduction from the subletting income. 

3) Ultimately the income would be taxable in your hands. The net income in the hands of wife would be minimum. Add wife as a co-owner in the property.

For detailed discussion you may opt for phone consultation