How to Handle Wrong TDS Credit and PAN Mismatch in Doctor-to-Doctor Hospital Rent Agreements (Section 194J

[Sundaraiah kollipara]

SIR,

 A doctor (landlord) has rented out their hospital premises to another doctor (tenant), who provides healthcare services there. The tenant doctor earned Rs. 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 Rs. 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?”

This situation involves misreporting of income in the wrong PAN due to a payment error. Here’s how the landlord (recipient doctor) and tenant (actual service provider) should address it without triggering double taxation or further TDS:

AI Summary

Doctor landlord to transfer TDS credit under Section 194J to tenant via declaration and no-objection certificate process A doctor (landlord) mistakenly received payment meant for another doctor (tenant) under a hospital rent agreement, resulting in TDS under Section 194J being credited to the landlord's PAN. The healthcare trust cannot amend the PAN or reissue the TDS certificate. To rectify this without triggering additional tax liabilities, the landlord should provide a declaration transferring the TDS credit to the tenant. This declaration must be submitted to the assessing officer to obtain a no-objection certificate. Upon filing the income tax return, the landlord can credit the TDS to the tenant's PAN, allowing the tenant to claim the credit in their return, thereby clarifying the correct ownership of income and avoiding double taxation or further TDS implications.