I had bank fixed deposit jointly with my father in either or survivor mode. My father passed away two months ago. The amount of the fixed deposit has been transferred to my savings account. Is this amount taxable?
In case any person receives gifts in aggregate of more than fifty thousand rupees during a year from all the persons, the whole of the amount becomes taxable in the hands of the recipient. So as long as the aggregate value of all the gifts does not exceed the threshold of fifty thousand rupees it is not treated as income of the recipient. The gifts received from specified relatives are fully tax-free without any limit. Likewise, any amount received under a Will or as inheritance whether from relatives or non-relatives is not treated as income irrespective of the value of the legacy received. So the value of fixed deposits received by you are nothing but inheritance and therefore are not subject to any taxation.
The tenant is paying rent in a single name but the house has a co-owner. The tenant is also depositing TDS in a single name as the rent agreement is in a single name. Please advise how to file an Income Tax Return.
Has the joint owner contributed to the purchase of the property? If yes, then execute a fresh agreement for both the joint owners and take the rental income in the ratio of the amount contributed. Offer proportionate income already received in both the names. There is a provision in the ITR for transferring the credit of TDS to another person in case part of the income is offered in that person’s name.
If the house property is owned in my wife’s name. Can I pay rent to my wife and claim a rebate for housing rent (HRA)?
There are two conditions for the allowance of HRA. First, the person should be in receipt of HRA from his employer and secondly, he is actually paying rent for the property which is not owned by him. There are no restrictions as to whom you cannot pay rent and claim HRA benefits including paying rent to one’s spouse. So strictly speaking you can pay rent to your wife and claim HRA benefits but practically a husband and wife cannot have a commercial relationship. Paying rent to your wife to claim HRA exemption can be viewed as an arrangement to evade tax and may result in litigation. So it would be advisable not to engage in such transactions to reduce the tax outgo. If you still want to do it, please ensure that your wife includes the rental income in her ITR to ensure strong footing in case of litigation. The HRA benefits are available only if you opt for the old tax regime.
Balwant Jain is a tax and investment expert and can be reached on jainbalwant@gmail.com and @jainbalwant on X.
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
