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Personal Finance News

Registering property in wife's name: ICAI suggests tax rule change in Budget 2025

rajeev kumar
By Rajeev Kumar

2 min read | Updated on January 23, 2025, 15:55 IST

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SUMMARY

Budget 2025 expectations for married couples: ICAI noted it is common to register property in the name of women in many Indian households. Several state governments have also incentivised the registration of property in the name of women by offering reduced stamp duty rates.

registering property in wife's name

Granting property ownership rights to women could be a significant step, says ICAI. Representational image

Budget 2025 expectations: The Institute of Chartered Accountants of India (ICAI) has recommended a method for the government to encourage property ownership by women across the country.
In its pre-budget memorandum submitted to the government, ICAI noted that it is common to register property in the name of women in many Indian households. Several state governments have also incentivised the registration of property in the name of women by offering reduced stamp duty rates.
However, the following two provisions of the Income-tax Act, 1961 discourage property ownership by women, according to ICAI.
1. Deemed ownership of property

An individual who transfers house property to his/her spouse is deemed to be the owner of the property under section 27(i) of the Income-tax Act, 1961.

ICAI said "the provision under section 27 acts as a deterrent by deeming the transferor-spouse as the owner".

It also discourages gifts or transfers of property to a spouse, except in the following circumstances:

  • Transfers made to a spouse under an agreement to live apart.
  • Transfers made to a minor married daughter.

"This restrictive provision discourages individuals from transferring property to their spouse, thereby negating the benefits of stamp duty rebate offered by state governments," the ICAI said.

2. Clubbing of income

The total income of an individual includes income from any property transferred directly or indirectly to the spouse due to the clubbing of income provision under section 64(1).

What ICAI recommends

ICAI said that granting property ownership rights to women could be a significant step toward making them self-reliant and enhancing their economic standing.

Therefore, it has recommended that Budget 2025 should remove the restrictive deemed ownership provision under section 27 as well as the clubbing provisions under section 64(1)(iv)/(vi). This will encourage property ownership by women.

Joint taxation for married couples

The ICAI has also recommended that the government should allow joint taxation of married couples by introducing combined tax slabs under the new tax regime. This will benefit families with single-earning members.
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About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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