Hi,
I am an NRI(working in Singapore), recently bought a house in India. My parents are staying in that house, also about to rent out the 3 shops in ground floor and 1 portion of the house in the same building.
So far I am not an assessee as I don't have any income so far. Now If I rent out the shops, the need to deduct the 30% TDS, which is a very tedious process for tenants(hence tenants not interested in taking) as well as for me. I am happy to pay whatever tax I need to pay but wanted to avoid these TDS problems.
Is any of this options works? or any other better options?
a) The property is in my name, I gift rights to stay and sublet to my parents. Since my parents are not NRI, there is no question of TDS and they show this as their income and pay tax accordingly.
b) I will rent it out to my parents as an annual lease of say 350,000 for the whole building whereas they stay in one portion and rent it out the rest of the building for say 40,000 a month. So the tenants don't need to worry about also my parents pay me the rent on annual basis, TDS process will happen only once a year. I will pay my portion income tax and my parents will pay their portion of income tax.
I prefer option 1 as there is no involvement of TDS, can that be done?
Thank in Advance.
Regards
Gupta.
CAclubindia
