Income Tax on rental income

When the property is transferred in your name , you are liable to pay Income Tax after execution of gift deed.

As per Income Tax Act, Rental income from a property being building or land appurtenant thereto of which the taxpayer is owner is charged to tax under the head “Income from house property”.

So, tax should be paid by the owner of the property,. This can't be changed by deed.

Hi,

Only the owner of the property can claim Income/Loss from House Property.

So,Till the time the property is in the name of your parents, then the Rental Income is taxable in their hands.

Once you become the Owner of the Property by way of Gift Deed, then the rental income should be taxable as Income from House Property in your hands.

Hello Sir,

As per Income Tax Act, the owner of the property pays taxes on the income generated by it. In your case, since the property is transferred to you, so are the one who is liable to pay taxes thereon.

If you want, you may let them enjoy the rental income but the taxes will still be borne by you.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Hello Sir,

No provision will help you as per the Income Tax Act is concerned, as it is very clear that the owner of the property pays the taxes. So even if you add in a clause which transfers the income in your parents name but still you will be the one liable to pay the taxes.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

If your parents are transferring the property as gift then there will not be any tax in your hands nor in their hands.

The Rent need to be declared in your income tax returns.

Dear Sir,

If you are a minor, then your parents have to pay taxes on the rental income even after the gift deed.

However, if you are major than you have to pay taxes on the rental income after execution of gift deed.

Please feel free to call/ revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Dear Sir,

Even if you mention this in gift deed, it's not going to help you. The answer remains the same.

Please feel free to call/ revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Hii,

Yes you can have that clause in the gift that during the life time of your parents they will legally enjoy the benefit of any income earned from the said property though the property is being transfer to you.

It will be better to have that gift deed is on stamped paper and notarized.

as it will be the case of conditional gift deed.