INCOME TAX18 Sept 2026
Can you transfer rent from personal property to your HUF? Know the tax rules | Mint
Crediting your personally owned property's rent to your Hindu Undivided Family (HUF) account does not shift the tax. Section 96 of the Income Tax Act, 2025, effective 1 April 2026, taxes that rent in the individual owner's hands, because ownership decides liability, not the bank account. Only income the HUF later earns by investing that rent escapes clubbing. Check with your tax advisor.
Key Statutory Highlights
- Under Section 96 of the Income Tax Act, 2025, which came into effect on 1 April 2026, transferring income without transferring the asset does not change its tax treatment.
- Rent from a property owned by an individual stays taxable in that person's hands even if the tenant pays it directly into the HUF's bank account.
- Income that the HUF later earns by investing that rent is not subject to the same clubbing treatment as the original rent.
Actionable Advice for Taxpayers / Founders:If you own property personally and send its rent to your HUF account, get the arrangement reviewed by your chartered accountant and make sure the rent is offered to tax in your own return, since ownership and not the bank account decides the liability.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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