Rent paid to my relative

[Asked by Guest]

I recently moved to USA. I own an apartment in Bangalore. I want to ask my tenant to deposit rent in my mother-in-law's account. Mother-in-law will show as her income, pay tax and file returns.

Is this allowed?

Or is it mandatory that only the owner should get the rent and pay tax for it? Reason is i have already crossed the 30% slab this year.

[Ganeshan Kalyani]

In my view it is your income and you should be taxed under your ITR.

[DR.MARIAPPAN GOVINDARAJAN]

Even rent my be deposited in your account. However this is your income and you may transfer the income by means of gift to your mother in law.

[KASTURI SETHI]

Thanks to both of experts for enrichment of my knowledge. By reading your replies I am gaining knowledge of Income Tax law. Now I am so confident that I can claim that I am not a raw hand in Income Tax field. Really credit goes to both of you and also, in turn, to TMI for providing this forum for the welfare of the public. Really it is yeoman's service which is rare in this materialistic world.

[Ganeshan Kalyani]

Acknowledgement for hard work is a boost to a person to keep continuing to contribute. This platform is very helpful for the needy. It also helps the leaner to gain knowledge. The experts are doing fabulous job by sharing their valuable knowledge and experience.

AI Summary

Rental income remains taxable to the property owner even if rent is deposited into a relative's account.
Rental receipts from a property are the income of the property owner and remain taxable to the owner even if the tenant deposits rent into a relative's account; the owner may subsequently transfer funds to the relative by gift, but such deposits do not shift the owner's tax liability.