dear sirs, One of our client have a shopping complex. The shopping complex was build in the land acquired by him and his 2 brothers by partition from his father.The 3 brothers have equal right in the property. They constructed a shopping complex in that property and let out. The problem is that , all the rent agreements are executed by elder brother. and the tenant was deducted TDS in his name. Another problem was some portion of this building was compulsorly acquired by Goverment for Highway project. And TDS certificate issued in favour of elder brother. How his taxability can be computed in this case. whether he will be taxed for the entire rent received. or according to his share in premises. He said that his brothers have enough income and he was not sharing the rental income with them . Whether his brothers are liable to pay tax? according to their share. kindly guide me
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computation of taxable income
In the above case as rental income is shown by the elder brother and TDS has also been deducted on that income against his PAN. Then he can show total rental income in his share and in such case no liability of other brothers on this income for tax exsist.
Hi joji, though all the TDS are in name of elder brother only....
But i think that it will be distributed among all the brothers.... I dont any criteria..
But it sounds illogical to divert all the rental income to the elder brother (though he wants or if all of them want)... Legally, all are liable to recieve such income and so on....
To answer this query better one would require to peruse the Rental/Lease Agreement entered into by the elder brother.
Secondly if the the elder brother does not share the rental income received by him he would be liable to tax on the entire amount. There would be no tax liability in the hands of his brothers on the concept that the same income cannot be taxed twice.
Further from the perspective of tax authorities, they are anyway not loosing any tax , there is no loss of revenue.
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