Joint Ownership of Rental Property

[Guest]

I have a property jointly owned with my mother. It is jointly registered under both our names and the home loan is jointly taken by us. We are also joint shareholders in the co-operative society in which the property is located. However the entire investment in the property and the EMI payments are made by me.

Can I split any rental income (profit/loss) from this property between me and my mother??

[CA Rachit Agarwal]

Refer Section 26 of the Income Tax Act, 1961.

It clearly says if the property is owned by more than 1 person and share is definite, then the proportionate income can be allocated  between the co-owners. Section 26 is silent about the investment pattern of the property.

Hence in our opinion the rental income could be assessable in your hands and your mother proportionately.

[CASeetharaman KC]

If you can prove that you and your mother have joint ownership in the property the income can be split equally between two of you

AI Summary

Allocation of rental income depends on defined co-ownership shares, not who pays the loan or investment costs. Joint ownership with definite shares allows rental income or loss to be apportioned proportionately to each co-owner; investment or EMI payments made by one co-owner do not by themselves alter the tax assessment if legal title and share are established, and proof of ownership and the declared shares are the relevant basis for allocation.