| Question And Answer | |
|---|---|
| Subject: | INCOME TAX QUESTION |
| Category: | Income-Tax |
| Querist: | kollipara sundaraiah |
| Answered by: | Law Intern |
| Tags: | TDS credit, TDS deducted |
| Date: | July 26, 2025 |
Sir,
A Doctor (landlord) has rented out their hospital premises to another doctor (tenant), who provides healthcare services there. The tenant doctor earned ₹40 lakhs from a healthcare trust for medical services rendered, but the payment was mistakenly credited to the landlord doctor’s bank account. TDS under Section 194J was deducted, and this amount is now showing in the landlord doctor’s AIS (Annual Information Statement), linked to their PAN.
The healthcare trust has stated that it cannot change the PAN or reissue the TDS certificate.
For income tax compliance, how should the ₹40 lakhs be correctly transferred from the landlord to the tenant doctor? Can this transfer be done without triggering further TDS or tax implications? What is the correct procedure to document this transfer and clarify ownership of income for tax purposes?”
The only way out is that you have to draft an agreement (MOU) between the landlord and the tenant, setting out the circumstances of the case, and stating that the landlord will pass on the net income to the tenant and that the tenant will offer the gross income and claim credit for the TDS.
A copy of the agreement (MOU) can be sent to the jurisdictional AO of both parties before filing the ROI to establish the bona fides.
In the returns of income, the landlord will neither offer the income nor claim credit for the TDS while the tenant will do both.
Presumably, the CPC will add the income in the landlord’s hands & give him credit for the TDS while in the hands of the tenant, the income will be assessed ( as offered) but credit for TDS will not be given.
Both parties will have to file appeals. The appellate authority will, if convinced of the genuineness of the claims, give directions that the income should be assessed in the tenant’s hands & credit for TDS be given to him notwithstanding that the TDS certificate is in the name of the landlord.