Tax implication & tds

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CA Subhankar Basu

Chartered accountant

193 Points Posted on 08 August 2015

A person is a registered owner of two flats,same are on rent @ Rs 12000 per flat pm,payment mode for getting rent is 'cash',but concerned owner normally deposited such rent amount in his spouse savings bank a/c,provided spouse is an unemployed.Bank int of savings bank a/c(contained only rent amount) of spouse exceeded Rs 10000,also total rental income exceeded Rs 250000,what is the tax implication on rent in respect of owner & spouse?Also details towards TDS on bank int.

Replies (2)

Rahul Verma

CA-Final

320 Points Posted on 08 August 2015

Dear Shubhanker

As per my personal understanding, since owner had diverted to his income to his spouse so diversion of income can not reveal him for paying tax. So owner is liable to pay tax on amount of rent received by him by applying the provisions of clubbing. Also the interest of bank will be taxed as the income of spouse as per the case law M.S.S. Rajan 252 ITR 126 (Mad), since interest income upto 10000/- can be claimed as deduction under section 80TTA. So if inocme from bank as bank interest is beyound the 10000 then she has to give tax on that income.

Also as per the my understanding and correct me if i am wrong that there is no provision of deducted tax by bank on saving bank interest.

Hope you got yours answer.

Thanks