I am currently renting out two units (ground, first floor) of my house in a residential area (in Bangalore). Both are being rented out to families. One of the tenants has asked if I can modify the rental agreement such that it will now be rented out to a new company he has just started. He will then pay the rent through this company. I am guessing he will have some tax benefits from this. But I wanted to make sure:
- It is legal to do so
- What implications will such an arrangement have for me? For e.g. somewhere I read that the company (paying rent) will have to do TDS on the rent paid and then at year-end, issue me a Form-16, which I will have to then use as part of filing my tax return (which will include rental income)
- Are there other things I would need to do (e.g. some registration/declaration with local city corporation, etc.)
Thank you...
CAclubindia
