For tax purposes I am an NRI & my spouse is an Indian resident. My spouse has no source of income.I have a flat which is in only my name which is rented out. The total annual rent in a financial year is less than 200,000 (two lakhs). AS i am a NRI , there is A Tax deducted at source(TDS) of 30% on the rental income every month. There is a lot of hassles involved in TDS ,filling of quarterly returns etc and there is a cost involved I have no problem showing this as income and then paying tax on this rental income, but want to avoid the TDS every month, due to the hassles involved. To avoid the TDS every month Can i give my spouse a power of attorney, Make the leave and license agreement between her and the tenant, then ask the tenant to give the rental income cheque in her name AS she is an Indian resident the TDS deductions can be avoided . When filling my tax returns I can then club the rental income (which is in my spouse name), as my income(shown as spouse income) ??(i am not evading taxes) Is this method allowed legally. If not this any other method??
If you don't want to make things complex and if this is your only income in India it's better to apply for lower deduction certificate from your assessing officer and give it to your tenant and he will not have to deduct TDS and your problem will be solved rather than complicating things.
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Thank you.
Hello,
Better if you can apply for Lower/No deduction certificate from AO if this is your only income in India.
Since you are non-resident as per income tax(as mentioned by you) and this is your only income in India being below Rs. 2,50,000, you can get No deduction certificate from the jurisdictional AO.
I hope that this answer satisfies your requirement.
Regards,
CA Hunny Badlani
Dear Sir,
Section 197 of the Income Tax Act, 1961 provides for the facility of NIL deduction of tax at deduction at a Lower rate of tax. To avail of this benefit, the assessee whose TDS is likely to be deducted on certain receipts should make an application before the TDS Assessing Officer who has a jurisdiction over his/ her/ its case. The deductee concerned may apply for a certificate for Nil or lower deduction of TDS on their receipts in Form No 13.
Once the certificate received by deductee, he/she/it can submit to Deductor to deduct the TDS at NIL rate or lower rate.
Deductor has to give this certificate details while filing TDS return and has to validate before filing. 197 certificate should be of 10 digit alpha & numeric number. Ex.1234AAAA45A
We may help you in entire procedure.
Hi,
If you club this income in your return, there is no issue from a tax point of view.
However, filing of tds return etc. is the duty of tax deductor and not yours. Why are you doing it?
Alternatively, you can also apply for a no tds certificate from AO. If it is accepted, there is no need to deduct tds
- As the property is in your name, option would not work.
- It is better to apply for NIL TDS deduction certificate online.
- TDS filing is a responsibility of the tenant and not yours.
