Tds for rent due to co-owners

This query is : Resolved

rafi (Querist)
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29 August 2015 Dear Sir,

One of my client is a co-owner in a property leased to a business firm. The equal shares of each co-owner has been defined in the co-ownership agreement. All the co-owners operated a joint bank account and entrusted my client in charge. The business firm transferred the rent directly into the joint account after deducting TDS @ 10%. The whole TDS was deposited against my client's PAN No. only. So, TDS got reflected only in my client's Form 26AS. Can I show lower income in my client's ITR as opposed to the total income shown in his 26AS? I will have to claim the whole TDS in my client's ITR and make all the other co-owners pay tax for the rent due to them without any claim of TDS. Is there any other option?

Amol S Joglekar

Amol S Joglekar (Expert)
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29 August 2015 There is no other option in this case.

Prospectively, you advise the deductor to make the TDS separately for each PAN.

rafi

rafi (Querist)
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27 September 2017 I agree with Mr. Amol. A co-ownership is categorised as Body of Individual for Income tax purpose. As such, no liability or benefits can b transferred from one co-owner to another except actual transfers. In this case you will have to claim the whole refund against your client's pan and make pmt from ur client's bank account to other co-partners. Prospectively u can request the business firm to charge TDS against each co-owner and also make payment separately to each co-owner in d joint account. The business firm may demand a new lease agreement in this regard.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Here's a clear summary of the TDS issue for rent paid to co-owners:

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### Situation:

* Rent is paid by a tenant to a joint account held by co-owners.
* Tenant deducts TDS @10% on the **total rent** but deposits it **only against one co-owner’s PAN**.
* Consequently, only that co-owner’s Form 26AS reflects the entire TDS.
* Other co-owners don’t get credit for TDS on their share of rent.

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### Key Points & Options:

1. **TDS credited only to one co-owner:**
Income tax department will consider TDS credit only for the co-owner whose PAN the TDS is deposited against. Others get no credit even though they have income.

2. **ITR filing for co-owners:**

* The co-owner with TDS reflected in 26AS must claim the entire TDS credit.
* Other co-owners will have to pay tax on their share of rent **without TDS credit** unless the TDS is reallocated/refunded.

3. **Claiming refund and sharing TDS among co-owners:**

* The co-owner who received TDS credit can claim refund on behalf of others, then distribute the amounts.
* Practically cumbersome and not ideal.

4. **Best practice going forward:**

* Ask tenant/business firm to deduct and deposit TDS separately against **each co-owner’s PAN**.
* Payments should be made separately to each co-owner or at least TDS remittance should mention each PAN individually.

5. **Legal basis:**

* For income tax, co-ownership is treated as "Body of Individuals". Income and tax liability are on co-owners individually, so TDS and rent should be treated proportionally.

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### Conclusion:

* Currently, no way to split the TDS credit automatically in IT dept system.
* You can only claim the entire TDS on the PAN against which it is deposited.
* For other co-owners, tax is payable but without TDS credit, leading to higher tax outflow.
* Advise tenant to do TDS deduction per co-owner going forward.

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If you want, I can help draft a letter/email to the tenant requesting separate TDS deductions for each co-owner. Would that help?

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