Owner and Deemed Owner

An Individual shall be considered as owner of a Property, when the document of title to the property is registered in his name.

  • The Assessee must be the owner of such property.
  • An Owner is a person who is entitled to receive Income from the Property in his Own Right. The requirement of registration of the sale deed is not warranted.
  • Ownership includes both Free-hold and Lease hold rights.
  • Ownership includes Deemed Ownership (Sec.27).
  • The person who owns the Building need not also be the Owner of the Land upon which it stands.
  • The Assessee must be the Owner of the House Property during the Previous Year. It is not material whether he is the owner in the Assessment Year.
  • If the title of the Ownership of the property is under dispute in a Court of Law, the decision as to who will be the owner chargeable to tax u/s 22 will be that of the Income Tax Department till the Court gives its decision on the matter.

Deemed Owner

In the following circumstances, Income from House Property is taxable in the hands of the person, even if the property is not registered in his name

  • Where the Property has been transferred to Spouse, for inadequate consideration, other than in pursuance of an agreement to live apart.
  • Where the Property is transferred to a Minor Child, for inadequate consideration, (except a transfer to Minor Married Daughter). Note: Where cash is transferred to Spouse/Minor Child, and the Transferee acquires property out of such cash, then the Transferor shall not be treated as Deemed Owner of the House Property. Provisions of clubbing u/s 64 will be attracted in such case.
  • Where a Person holds an Impartible Estate.
  • Person is a Member of Co—Operative Society, Company, or other Association, and has been allotted a House Property by virtue of His being a Member, even though the property is registered in the name of the Society / Company / Association.
  • Where a Person is allowed to take or retain possession of any building or its part, as part-performance of a contract u/s 53A of the Transfer of Property Act, 1882. (Possession of the Property is given to the Person, but the Title Deeds have not yet been transferred, i.e. Registration not yet completed.)
  • Where a Person is a Holder of Power of Attorney enabling the right of possession or enjoyment of the property.
  • Where the Property has been constructed on a Leasehold Land.
  • Where the ownership of the Property is under dispute.
  • Where the property is taken on a lease for a period of not less than 12 years, then the Lessee shall be deemed as the Owner of the property. (Exœpt any rights by way of lease from month to month or for a period not exceeding one year.)

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