• Rent from father's property to be allowed for daughter to enjoy

My friend is a single mother, deserted by her husband. She is unable to support her daughter fully. My friend's father want to gift the rent from one of his houses to his daughter. He doesn't want to give away the house to her as of now yet. He has other kids too and hasn't written his will yet. If she is able to get the rent, it would be a respectable income rather than directly depending on her father for every expense. 
Is it possible to make this legal for her to become a beneficiary without being the title owner? She would need some legal document as proof to be authorized to receive the rent. 
Also, would it be taxable under her name as she is legally receiving the rent.
Asked 6 years ago in Property Law
Religion: Hindu

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12 Answers

1) father can execute POA in hot favour to receive rentals of the property

2) in the alternative father can execute gift deed in your favour

3) once gift deed is executed you woukd be absolute owner of property and entitled to receive rentals

4) in alternative father can every money transfer rents received from property in daughter name

Ajay Sethi
Advocate, Mumbai
96918 Answers
7820 Consultations

Yes, if rent agreement allows so.

Jaswant Singh
Advocate, Gurugram
930 Answers
2 Consultations

1) Her father has to make a WILL and get registered same WILL with registrar, mentioned in that WILL for life time of his daughter will receive a rent from particular property after the death of his father as well till his daughter is alive.

Ganesh Kadam
Advocate, Pune
12987 Answers
262 Consultations

She need not have any legal document as it is her father's discretion to gift the rent to her and nobody can question. If the income is above 2.5L, it is taxable. She has to file a return to that effect.

Rajaganapathy Ganesan
Advocate, Chennai
2190 Answers
8 Consultations

This is my response to you:

1. The rent cannot be gifted;

2. The name of the flat owner receives the rent by law;

3. But in special conditions, if the landlord wishes to transfer the proceeds of the rent to his daughter then there should be some clause in the rent agreement;

4. If there is no clause, then the daughter will receive the money from unknown source;

5. It would not create problems in taxation because daughter is dependent of her father and a father can give any amount of money to daughter out of love and affection;

6. If the father cannot alter/change the rent agreement, then execute a MOU on stamp paper and notarize the same.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

Legally he cannot ask his tenant to pay the rent to her because she cannot issue a valid receipt as she is not the legal owner nor she has been authorised to collect the rent by him in written or by a power of attorney deed Alternately, he can receive the rent deposited to his bank account directly by the tenant, he may pass on standing instructions to transfer this portion of amount to her bank account by obtaining her bank account details.

T Kalaiselvan
Advocate, Vellore
87120 Answers
2338 Consultations

1. Her father can simply make an affidavit stating that he is desirous to gift the rental income to his daughter

2. Her father can then give standing instructions to his bank to debit his account for the rent deposited and credit the same to your friend's account

3. The rent amount will not be taxable in her hands. Use the affidavit as a proof that the rent is gifted to her by her father and it's not her personal income which is liable to income tax

4. However under the income tax act there is a limit beyond which the gifted amount will be counted in your friend's income. Kindly consult a CA for that

Yusuf Rampurawala
Advocate, Mumbai
7678 Answers
79 Consultations

Dear Cleint,

Why don`t she file for maintenance and alimony for her and child. Definitely will be ordered.

Agreement with tenant that rent will paid to her in her account, but taxable at father`s end/income u/sec 64 of I T Act.

Oral Gift is permissible, not required any written deed, but must shown in return, rent income given in gift.

Yogendra Singh Rajawat
Advocate, Jaipur
22991 Answers
31 Consultations

Her father can give her a revocable Power of Attorney authorising her daughter to collect rent on his behalf.

This won't transfer property rights as well as your friend would be able to collect the rent herself.

Siddharth Jain
Advocate, New Delhi
6375 Answers
102 Consultations

The father can execute a Special Power of Attorney (registered with the Sub-Registrars office) only to collect/receive rent from tenant.

Thanks

Abul Kalaam Azad
Advocate, Madurai
8 Answers
2 Consultations

Yes, your friend's father can include a clause in the rental agreement directing the tenant to pay the rent to your friend every month which act on the part of the tenant would give him/her full discharge in respect of his/her rent payment obligations under the rental agreement. If your friend receives the rent, she shall be liable for tax.

Swaminathan Neelakantan
Advocate, Coimbatore
2910 Answers
20 Consultations

Yes it can be done through a Registered gift deed

Prashant Nayak
Advocate, Mumbai
32479 Answers
200 Consultations

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