Claim audit · FY 2026-27
“Put property in your wife's name to save tax on rental income”
The condition that decides it
Income from property transferred to a spouse without adequate consideration clubs back to the transferor under section 64(1)(iv). The split works only if the spouse pays the full fair market value from her own independent funds.
What the department sees
HIGH
Data the Income-tax Department already receives automatically — the reel doesn't mention this part.
The real math
A husband transfers a rented flat to his wife to 'save tax' on the ₹6,00,000 annual rent. The transfer is without consideration, so section 64(1)(iv) clubs the rental income back to him: the ₹6,00,000 (after the 30% section 24(a) deduction, ₹4,20,000) is taxed at his slab rate, and the transfer achieves nothing. If his marginal rate is 30% and hers 10%, the expected saving was 20% of ₹4,20,000, which is ₹84,000 a year — all of it lost to clubbing. The arrangement works only if the wife pays the full fair market value of the flat from her own independent funds, making the purchase a genuine acquisition rather than a transfer. The reel's arithmetic ignores section 64(1)(iv) entirely; the statute attributes the income to the transferor regardless of whose name holds the title. Any gift-tax angle is separate: a spouse is a relative, so the transfer itself is exempt from 56(2)(x), but the income attribution is the trap.
Questions people actually ask
There's a right way to do this
Can I transfer money or assets to my spouse to split income and save tax?
Sections: 64(1)(iv), 56(2)(x) · We audit claims, not creators. Reviewed by Harun Raaj & Associates, Chartered Accountants · All audited claims