House rent agreement

[Unnatipanda527]

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Unnatipanda527
PARTICIPANT
April 16, 2025 at 9:12 pm

Can i make power of attorney in my wife’s name to rent out a property using her pan card, so that income tax liability is on her.
I am already paying very high taxes. I want to shift this liability on her. Pls guide.

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[Epicneelam8203]

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Epicneelam8203
PARTICIPANT
April 16, 2025 at 10:15 pm

Hi, I’m an advocate, here’s what you need to know.

Just giving a Power of Attorney to your wife and using her PAN does not shift the income tax liability from you to her if you are the actual owner of the property.

As per Indian Income Tax Law, the rental income is taxed in the hands of the owner, irrespective of who manages the property or collects the rent. Even if your wife executes the rent agreement and collects the rent via PoA, the income will still be clubbed with your income under Section 64 of the Income Tax Act.

But there is a loophole.

If you lease the property to your wife for a nominal amount and she then sublets it and earns rent from the subtenant, the taxability will shift onto your wife.
The lease should appear to be genuine and should be compliant ,backed by proper documentation and bank transfers (lease payment by your wife’s account to yours)
Basically, it must stand the test of scrutiny by tax authorities (if it comes to that.)

If you need more help or guidance with the process, feel free to message me!

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[Bravedevika7220]

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Bravedevika7220
PARTICIPANT
April 17, 2025 at 1:24 am

Ownership does not change with POA, right? Just the decision making ability changes.

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[Unnatipanda527]

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Unnatipanda527
OP
April 17, 2025 at 2:23 am

Ut then my wife can rent out the property, and give reciept to tenant and i will not be liable to be taxed on that income.

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[Bravedevika7220]

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Bravedevika7220
PARTICIPANT
April 17, 2025 at 3:09 am

You are the owner so the income is yours. You are liable for the tax on the income. POA does not shift tax ownership.

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