Home > Income Tax > House Property > Deemed Ownership – Sec 27

Deemed Ownership – Sec 27

U.C Date : 25 Feb 2015

In the following cases the person is deemed to be owner of the property even if they are not the legal owners of the property:-

1) An individual who transferred his property without adequate consideration to his or her spouse (otherwise than in connection with an agreement to live apart) his minor child (not being married daughter) is deemed to be owner of that property.
If an individual transfers another asset and his spouse or minor child purchase house property from that asset, then such individual is not treated as deemed owner.

For Ex:- If  Mr. X gifts Rs. 5,00,000 to his wife and his wife purchases a house property from that Rs. 5,00,000 then Mr. X is not treated as deemed owner and income from such property is taxable in hands of his wife.

2) If property is allotted by company/co operative society to its shareholders/members, then technically the company/cooperative society may be the owner. But the shareholder/member to whom property is allotted is deemed to be owner of property.

3) If buyer has taken the possession of the property without getting the sale deed registered is deemed to be owner of the property.
A person who is allowed to take or retain possession of any building (or part thereof) in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882, is also  deemed as the owner of that building (or part thereof).

4) A person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building (or part thereof) by virtue of any such transaction as is referred to in section 269UA(f) [i.e. if a person takes a house on lease for a period of 12 months or more, Persons who purchase properties on the basis of Power of Attorney]

Bare Act for Sec 27

Bare Act for Sec 27

For the purposes of sections 22 to 26—

  (i) an individual who transfers otherwise than for adequate considera-tion any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred;

 (ii) the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate ;

   (iii) a member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme of the society, company or association, as the case may be, shall be deemed to be the owner of that building or part thereof ;

 (iiia) a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), shall be deemed to be the owner of that building or part thereof ;

 (iiib) a person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction as is referred to in clause (f) of section 269UA, shall be deemed to be the owner of that building or part thereof;]

 (iv)[***]

 (v) [***]

 (vi) taxes levied by a local authority in respect of any property shall be deemed to include service taxes levied by the local authority in respect of the property.

4 comments

  1. rakesh.patelnic@gmail.com

    Dear Sir,
    I have purchase a property and registry is in the name of my wife. I want to claim the tax benefit for repayment of house loan but my office deny giving the tax rebate saying that you are not the registerde owner of the property. How can i get the housing loan benefit. What is deemed owner and how to make deemed owner of property.

    Kindly reply so that my problem gets resolved.

    • Prateek Agarwal

      You will become deemed owner if you had transferred the property to your wife without consideration.
      You can not become deemed owner by your choice.

  2. Dear Sir,

    Please provide your view in the below matters relating to taxability under house property.

    If the rent is received by the person other than the owner of the house property and such person not being the spouse of the said so owner. Then in such case, whether the taxability of rent will be in the hands of owner or will be covered u/s. 27 and under which head i.e. House Property or Other Sources.

    • Prateek Agarwal

      Such transaction will be taxable in the hands of owner under House Property unless it fall in sec 27.

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