Should hra be equally divided among flat owners ?

It in not clear whether the joint owners has contributed towards the acqusition of property. It seems that your mother is not having any independent source of income & her name has been included for the sake of convinence. If that is the case the Rent paid should be devided amoung the contributers in their ratio of investment. If your brother is also residing in the same house then the rent can be included in your father's income

Thanks for your reply Ravindra. All joint owners have contributed towards the purchase, even my mother. Its only recently, that she does not have a source of income. So, do you mean, I have to create 3 cheques for each owner ?

Regards,

Aazim

Even if, one cheque is prepared in name of mother, the rental income will be taxable in hands of each co-owner in the proportion of their contribution in the house. In that case, the excess money received by mother shall be deemed gift from other co-owners in her hand but will not be taxable being relative in this case.

To avoid confussion better make three cheques. Even single cheque does not make any difference. For better planning take advise of professional after giving relavent details

Hi Vineet,

                     Thanks for your reply. The excess money recd by my mother will be considered as gift from my father & brother.

1. So, would my father / brother have to pay tax on the same or would only my mother have to pay tax.

2. If there any format agreement / gift deed that needs to be prepared to gift money to my mother ?

Regards,

Aazim

Hi Ravindra,

                           Well, in that case my brother & father might have to pay tax. Thats what I want to avoid through smart planning. I want to know, whether the Income Tax law has a rule, that states that the rent has to be divided among all owners, even though some owners (2 in my case), are more than willing to give their share to the 3rd owner (my mom)

Thanks.

Aazim

Giving gift by ur brother to ur mother is not an issue but gift by ur father to ur mother attracts Sec 64 for clubing of Income. However both have to tax on rental income independently before gifting the same. For tax planning u have to contact some professional with details

Hi Ravindra,

                         Thanks for your response. I did a bit research myself & came to know the following.

 As per the Income tax act, the Gifts received from any of your relatives are fully exempt from tax. Whether you are received the gifts as Cash, Cheque or any goods. You are not liable to pay the tax for these gifts. Here the “relatives” term defines by the Income Tax act as follows :

   1. Spouse of the individual

   2. Brother or sister of the individual

   3. Brother or sister of the spouse of the individual

   4. Brother or sister of either of the parents of the individual

   5. Any lineal ascendant or descendant of the individual

   6. Any lineal ascendant or descendant of the spouse of the individual,Spouse of the person referred to in clauses (ii) to (vi).

So, based on this, my father can gift my mother & then to show that the income is not clubbed, my mom can create an FD in her name.

Regards,

Zim

Hi,

I co-own a flat with my parents and 100% contribution towards buying the flat was done by my father. Can I pay rent to my father for living in this house?

Regards,

Vikas