Tds mismatch due clubbing of income from house property

TDS 737 views 4 replies

nitin sabherwal

Others

25 Points Joined February 2014

Hello everyone,

I am in a bit of a predicament.

I purchased an apartment for which I have made payments from my own funds, i.e., no contribution from my wife. However, at the time of registration of the property I included my wife's name as the second name in the Conveyance Deed.

Subsequently the apartment was given on rent to a company which made payments in 50:50 ratio to me and my wife and also deducted TDS in both our individual names. (FY 2011-12)

At the time of filing my IT return, I was advised by my CA that as I had alone paid for the property, and I am in the higher tax bracket, the rental income paid by the company in my wife's name has to be clubbed in my income. Hence, I added that income to my income and paid tax on it. I also took benefit of the TDs deducted by the company in my wife's name in my return.

This has come as a TDS mismatch and now I have received an intimation from the income tax department to have the TDS rectified.

Can someone please advise me what are the options available to me?

Would it be a problem for the company to revise my TDS form? The company has said that it might be a problem to file a revised TDS though they are still exploring options as well.

Isin' t there a section under which I can claim benefit of TDS filled in a different person's name when that person's income is being clubbed in mine?

Many thanks for your replies.

Replies (4)

CA Vikrant Arora

Practicing Chartered Accountant

67 Points Joined June 2007

Originally posted by : nitin sabherwal
	Hello everyone, I am in a bit of a predicament. I purchased an apartment for which I have made payments from my own funds, i.e., no contribution from my wife. However, at the time of registration of the property I included my wife's name as the second name in the Conveyance Deed. Subsequently the apartment was given on rent to a company which made payments in 50:50 ratio to me and my wife and also deducted TDS in both our individual names. (FY 2011-12) At the time of filing my IT return, I was advised by my CA that as I had alone paid for the property, and I am in the higher tax bracket, the rental income paid by the company in my wife's name has to be clubbed in my income. Hence, I added that income to my income and paid tax on it. I also took benefit of the TDs deducted by the company in my wife's name in my return. This has come as a TDS mismatch and now I have received an intimation from the income tax department to have the TDS rectified. Can someone please advise me what are the options available to me? Would it be a problem for the company to revise my TDS form? The company has said that it might be a problem to file a revised TDS though they are still exploring options as well. Isin' t there a section under which I can claim benefit of TDS filled in a different person's name when that person's income is being clubbed in mine? Many thanks for your replies.

Th correct way would have been to get the PAN rectified in the TDS return of lessee with yours. In case, lesee disagrees, file your return with 100% rent in your return, but claiming only your own share of TDS and paying the balance amount of tax, if any applicable. And file your wife's return by not showing the rental income, but claiming the TDS deducted by the lessee for your wife' PAN and getting the same back by way of refund.

nitin sabherwal

Others

25 Points Joined February 2014

Vikrant thank you for your reply.

Was wondering, how difficult is it for a company to file a eTDS correction? As in is it a long drawn process or fairly straight forward?

CA Vikrant Arora

Practicing Chartered Accountant

67 Points Joined June 2007

Originally posted by : nitin sabherwal
	Vikrant thank you for your reply. Was wondering, how difficult is it for a company to file a eTDS correction? As in is it a long drawn process or fairly straight forward?

Whether difficult or simple, if genuinity requires, company should revise the return. Time involved is mere 15-20 minutes. As your case is related to FY 11-12, there should not be any problem to company for revising the return, but for current year (FY 13-14), company might deny you the same, as changing more than 2 alphabets/numbers of PAN will result in penal provisions on them.

Vishal Goel

Chartered Accountant

1693 Points Joined April 2014

As per Rule 37BA, Clause 2(i), Where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee. Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax.

Request the deductor to file the revised TDS return so the tax will be reflected in your’s name in 26AS.