I have recently come to know that the owner of the house that am living on rent in has been staying out of india since a very long time. His brother manages his rental property here in mumbai and did not bother declaring this to me(rental agreement bears brother's name and is not registered or notarised or PoA etc. however i make payments to the owners account in india). Its also recent knowledge to me that tenants are supposed to deduct a TDS of 31.2% before making the rental payment to NRI owners. Upon confronting the owner now, he claims to have several properties in mumbai(most of which are commercial shops for which those tenants pay TDS) and declares all his income and pays taxes on time and hence there is no evasion whatsoever. He has even sent me all the details of taxes paid. My question is will I have to pay penalty even if there is zero tax evasion on the owner's part?(i have checked his returns and am certain the owner has'nt defaulted in any way)
In the event am served a notice, can i claim that the owner withheld details of his true place of residence at the time of renting out his property?
CAclubindia
