Do clubbing provisions apply to rent credited to a son's account for property owned by his father?

Taxability of rent income

Many individuals receive non-salary income from sources such as rental properties or interest earnings. Today’s Ask Wallet Wise explains how to report such an income in tax returns when the property is owned by the father but the rent goes to the son.

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My father owns a property where we live as family. We have let out two portions of the property for rent. We renewed the rental agreements in June 2025 where my father is the sole owner but due to his old age and he not being tech savvy, the monthly rent is being deposited in my bank account.  I don't own the house property. Should I show the money deposited in my account as my rental income along with my regular income?  

Expert advice: It seems that under the rental income the rent is directed to be paid to your bank account. This can be treated in two ways. Firstly, the rental income accrues to your father and he has directed the same to be credited to your account while retaining rights over the money being transferred to your bank account. In this situation the rental income will have to be included in the ITR of your father.

In the second scenario, the same can be treated as transfer of income without transferring the asset, which is unlikely as the rental income is credited to your bank account for convenience. However, if your father intended to transfer the rent for your benefits, the rental income would still become taxable in the hands of your father due to clubbing provisions of section 60 which required that the income shall be clubbed in the hands of the owner who has transferred only the right to receive the income without actually transferring the asset to the beneficiary.

The situation can only be judged and decided on perusal of the rental agreement but the ultimate effect would be the same and the income would be taxed in the hands of your father either way.

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