I-T on flat rentals

S. Murlidharan | Updated on February 13, 2011 Published on February 13, 2011

I have executed a gift deed in favour of my wife for two flats. My wife doesn't have any salary income, but receives a house rent of Rs 1.6 lakh per annum from the flats gifted . Can my wife file a separate ITR for her income?

Sivaramaprasad, e-mail

The two houses are deemed to be owned by you since you had transferred them to your spouse without consideration and the rental income therefrom would be taxable as your income in case it is more than the market rent. The tax is on annual value which normally means actual rent or market rent whichever is greater. You can claim a standard deduction of 30 per cent on the net annual value i.e. annual value minus municipal taxes actually paid. Assuming there is no municipal tax, you can straightaway claim Rs 48,000 as standard deduction and for this you do not have to produce any proof. Interest payable on borrowing can also be deducted. Since the income is taxable in your hands, your wife does not have to file any return ase she has no taxable income.

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Published on February 13, 2011
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