Rental income taxability in case of co-ownership

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Rental income taxability in case of co-ownership

Can I share the rental income equally with my wife and we both file tax accordingly? She is co-owner however the EMI on home loan is paid by me. Also how to claim the interest subsidy of Rs. 2 Lac in this case?

Profile photo of SUMAN PRAKASH JOSHI Asked By: SUMAN PRAKASH JOSHI 1 replies 1 helpful answers Last Updated: 5 months, 1 week ago
  • Profile photo of SUMAN PRAKASH JOSHISUMAN PRAKASH JOSHI
    Participant

    Can I share the rental income equally with my wife and we both file tax accordingly? She is co-owner however the EMI on home loan is paid by me. Also how to claim the interest subsidy of Rs. 2 Lac in this case?

  • Profile photo of Neha JoshiNeha Joshi
    Moderator

    Rental income from property, cannot be clubbed with wife / spouse, if the wife does not earn any income or has not contributed financially in purchasing the property. The clubbing of income provisions will apply in this case and the rental income will be clubbed in your income as if it is income earned by you.

    For the interest deduction of Rs 2 lacs, you cannot claim it jointly with your wife since she is not repaying the home loan EMI with you. She should be contributing financially to the repayment and also in the purchasing of the property in order to claim any deductions. Moreover, if the property in question is a rented one then the cap of Rs 2 lacs per year is not applicable on the deduction. However, according to Budget 2017, the loss from house property that can be set-off against any other income is capped at Rs 2 lacs.

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