Renting Property to Wife to Sub Let as Fully Furnished

Renting Property to Wife to Sub Let as Fully Furnished

Hi,

I own two apartments in Greater Noida. My wife is not working as of now. Can I rent the flat to my wife, and she can make it fully furnished to sublet it further? She will be taking care of all the future maintenance of the flat as well. My question is

1. If I take the "market rent" of a raw flat from my wife, can my wife show the rent received from the fully furnished apartment as her income and file ITR?
2. If yes, can my wife deduct rent paid to me as an expense? Or any other deduction like maintenance of appliances/furniture, etc.?
3. If this arrangement is possible, what documents should I maintain?

Thanks,
Neeraj

Asked 1 day ago in Income Tax

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! 😊

Shubham Goyal

CA, Delhi

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