My wife and I are joint holders of two properties (one being self-occupied and the other let out for rent). Can the entire rental income from our jointly owned properties be declared as my income for tax filing purposes, or is it obligatory to split it between us? Considering my wife’s sole income source is dividends from investments, and she has no other earnings, is she eligible to submit Form 15G if her total income remains below ₹3 lakh under the new tax regime?
—Jaikumar
If the properties are purchased by you, then the rental income from the property should be reported as your income, even if the property is held as joint holders. But if your spouse has contributed to the purchase of the property from her own funds, then the proportionate income should also be declared in the income tax return of the spouse.
For Form 15G, the following conditions apply:
The applicant must be a resident individual and below the age of 60 years; the tax calculated on total income should be zero; and income should fall below the maximum limit not subject to taxation.
Provided your wife satisfies the other conditions, Form 15G can be submitted if the total income does not exceed ₹3 lakh under the new tax regime.
Is it necessary for an individual who transfers a substantial amount of money to their spouse’s account to disclose this transaction in their income tax return (ITR) or maintain records of it? Additionally, is the spouse who receives the money required to report it in their ITR, especially if they do not file one due to having income below the exemption limit?
—Name withheld on request
Gifts given to relatives, including spouses, are exempt from taxation. Currently, there are no provisions in the income tax return to declare such gifts. In the case of a spouse receiving a gift, there’s no provision in ITR 1 for the declaration of such gifts.
However, gifts may be declared as exempt income in ITR 2. Additionally, if the deposit in their savings account exceeds ₹50 lakh, the spouse would be required to file an income tax return even if their income is below the exemption limit. It’s important to note that income generated from any investment made by a taxpayer for their spouse needs to be clubbed with the income of the taxpayer when such income accrues to the spouse.
For instance, if the money given to the spouse is invested in a fixed deposit, the interest arising on such a fixed deposit should be clubbed with the income of the taxpayer. This income should be declared by the taxpayer in the income tax return applicable to them.
Neeraj Agarwala is partner, Nangia Andersen India.
If you have a personal finance query, write to us at mintmoney@livemint.com to get it answered by experts.
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Published: 07 Apr 2024, 06:47 PM IST