TDS on Rent Clarification

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musabbir (Querist)
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27 October 2023 Please guide us U/s 194I
We have taken a property on rent @ 22000/- pm make two agreement of 11000 each in the name of Husband and wife but they are not joint owner of the said property. Is TDS applicable u/s 194J

RAJA P M

RAJA P M (Expert)
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28 October 2023 If they are not joint owner then the aggreement is not valid.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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15 January 2024 TDS. The maximum TDS-free amount is Rs. 2.4 lakhs in one financial year (effective from the financial year 2019-20) under section 194I.

As per my understanding, Yes rent agreement can be prepared without changing owner of land., In rent agreement names of all legal heirs will be mentioned as owners, All legal heirs have to sign the agreement as co-owners, Rent can be collected by one owner in his or her bank account mentioned in the rent agreement. That may be a family arrangement. The law respects family arrangements.

Again one can also give an authorisation letter or a GPA in favor of the chosen heir to enter into the rental agreement with the prospective tenant or all the them can jointly enter into the rental agreement with the tenant. After the above, the rent agreement may be executed by ANYONE person or jointly with all, without any legal hitch, with an inbuilt clause that Rent would be payable to this particular owner (s) only.

However, It is better to change the ownership record in the registrar's office through the process of mutation

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