NRI house owner, tax question on rent collected
My elder brother is a resident citizen of UK and he owns a house in Bangalore. The house will be given on rent shortly and he wants our mother staying in India to collect the rent and use it for her living expenses.
In the above scenario, how should the income declaration & subsequent tax arising out of this be treated? Is there any way where in my mother can show this income as her income and file it as part of her income tax return? We want to avoid the hassle for my brother having to declare this income in UK and pay tax there, but without having to transfer the ownership of the house to my mother's name.
Asked 2 years ago in Income Tax from Bangalore, Karnataka
Income arising from rent will be taxable in your brother's hand under the head Income from House property. There is no way you can transfer the taxability of income from him to your mother's hand unless you transfer the asset.
CA Ankit Adhyaru
As per my knowledge, income should be shown in the name of property holder. To show the income in the mother's name your brother will have to transfer property rights.....
Sorry sir, there is no way under income tax act to show the income under your mother's name without transferring the property.
Your brother needs to take PAN card which will be delivered to him in UK. He need to declare the same in the IT Returns to be filed in India.
Your mother cannot show the same in her Return of income as for showing the rent only registered owner can show the same.
You can make a gift deed on your mother unregister and show in her income.
As the house is in the name of elder brother the taxability shall be on your brother only and the income shall be taxed to him subject to deduction and allowance.
The only way possible is transferring the house in the name of mother.
As per the Indian Income Tax Act guideliness, the only way your mother can show the rental income as her income only if the title/ ownership is passed on to her.
Trust that clarifies your query.
Feel Free to get back for any further clarifications.
CA Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP