umesh kushwaha (5 Points)
24 March 2025Today I received email from insights.gov.in mail id. However, it appears that no TDS has been deducted on the rent paid as required under the TDS provisions u/s 194-IB. We kindly request that you verify this claim and rectify any mistakes by filing an updated ITR by 31.03.2025
Why this is flagged for last two years. Even I shown PAN card of landlord who does not comes under the incometax. I showed max 6lacs as rent paid.
Can I ignore this or I have to take further action?
CA Rashmi Gandhi
(Chartered Accountant)
(86432 Points)
Replied 25 March 2025
Non-Deduction of TDS under Section 194IB
Section 194IB mandates that an individual or HUF (not subject to tax audit) must deduct TDS @ 2% on rent exceeding ₹50,000 per month before making the payment to the landlord.
If your rent was ₹6 lakhs per year (₹50,000 per month), you were required to deduct TDS @ 2% (₹12,000 per year) and deposit it using Form 26QC.
CA Rashmi Gandhi
(Chartered Accountant)
(86432 Points)
Replied 25 March 2025
Landlord's PAN Submission Does Not Exempt You
Even if your landlord does not have taxable income, TDS is still required to be deducted if rent exceeds the threshold.
The PAN submission only ensures that TDS is deducted at the correct rate (2%), but it does not waive the TDS requirement.
umesh kushwaha
(5 Points)
Replied 25 March 2025
Can I deduct the tax of landlord or file the file revised ITR for myself or can ignore this
CA Rashmi Gandhi
(Chartered Accountant)
(86432 Points)
Replied 25 March 2025
✔ Calculate & deposit the TDS now using Form 26QC on the TIN-NSDL portal.
✔ Pay any interest & late fee (1% per month for non-deduction and 1.5% for late payment).
✔ Generate Form 16C and provide it to the landlord.
Prakash Kandavel
(8 Points)
Replied 25 March 2025
Got the same note too from AY 2022-2023 till now. Couple of questions
umesh kushwaha
(5 Points)
Replied 25 March 2025
I already checked on IT comliance portal but there is nothing pending and no option to validate the issue. Not sure whats going on in IT department.
CA Rashmi Gandhi
(Chartered Accountant)
(86432 Points)
Replied 25 March 2025
As per Section 201(1) of the Income Tax Act, if the deductor (tenant) fails to deduct TDS but the deductee (landlord) has already paid the full tax on the rental income, then:
✅ The tenant is NOT treated as an "assessee in default."
✅ No need to deduct TDS now since the landlord has already discharged the tax liability.
✅ Only interest for late deduction (1% per month) may apply, but no further penalty.
MHM consultant
(2 Points)
Replied 25 March 2025
The notice likely flags missing TDS on rent under Section 194-IB, which applies if rent exceeds 50,000 per month by an individual/HUF (not liable for tax audit). Since your total rent is 6 lakhs annually, TDS may not apply if paid monthly under 50,000. However, verifying compliance is advisable. If correct, respond or update your ITR; ignoring it may lead to penalties.
CA Rashmi Gandhi
(Chartered Accountant)
(86432 Points)
Replied 25 March 2025
If questioned by the IT Department, you can reply stating:
✔ TDS was not deducted because the landlord has already paid full tax on the rental income.
✔ As per Section 201(1), there is no default since the tax liability has been fully discharged.
✔ Provide the landlord’s ITR acknowledgment or Form 26AS as proof of tax payment.
CA Rashmi Gandhi
(Chartered Accountant)
(86432 Points)
Replied 25 March 2025
If questioned by the IT Department, you can reply stating:
✔ TDS was not deducted because the landlord has already paid full tax on the rental income.
✔ As per Section 201(1), there is no default since the tax liability has been fully discharged.
✔ Provide the landlord’s ITR acknowledgment or Form 26AS as proof of tax payment.
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