The Income Tax Department is more proactive than ever, utilizing information gathered from various sources to assess the accuracy of Income Tax Returns. The Department has effectively transformed its entire network into a vigilant system and is acquiring comprehensive details about an individual's transactions throughout the year, including Fixed Deposits, Incomes earned, securities traded, Rent received, and Property sales or purchases, etc. Consequently, assesses have no option but to disclose their complete incomes.
The Disclosure of rent payment made by the Assessee for claiming HRA deduction was earlier mapped with the PAN of the Landlord, and the same started reflecting in AIS of the landlord as rent Income. Therefore, the Assessee could not disclose fake Rent as the same shall be considered as income of the Landlord.
Now, the department is invoking section 194-IB for the deduction of TDS on rent paid. The taxpayers are getting messages and notices where they have claimed deduction of HRA by declaring rent paid, but have failed to deduct the TDS on the same under section 194-IB. If you are the one who has received such notice, then this article discusses the possible course of action you may resort to.
1. Basis of issuance of Notice
The Income Tax Department selects the following method for sending Notices:
- Rent Paid Declared for Claiming HRA Deduction:
- The Income Tax Department picks the amount declared as rent paid while claiming HRA Deduction.
- As per Section 194-IB, TDS is to be deducted if the rent amount exceeds INR 50,000 per month or part of the month.
- Therefore, if rent paid to a landlord exceeds INR 6,00,000/-, then the same is selected for further validation.
- Validation with TDS Deduction:
- The IT Department cross-checks the TDS deducted by the Assessee on the rent under section 194-IB as per the filed TDS Return.
- Issue Notice:
- If no TDS is deducted by the Assessee or TDS is short deducted, then a notice is issued to the Assessee for failure to deduct TDS.
The Assessees are initially getting intimation mails and messages about checking their TDS compliance on rent paid. However, ignoring these intimations may result in notices.
2. Action to be Taken
The Assessee can take the following actions if he has failed to deduct and deposit the TDS under section 194-IB:
2.1 If HRA deduction is claimed without any actual payment of rent (i.e., Fake rent payment)
- If you have claimed deduction for HRA without any actual payment of rent, then it is time to rectify such mistakes.
- The due date to file revised returns has expired for all earlier financial years.
- Therefore, now the Assessee only has the option to file the updated return in Form ITR-U, where the Assessee can forgo the HRA deduction and have their error rectified by paying an additional tax amount with interest.
2.2 HRA deduction is claimed against the actual rent payment
If you have made actual payment of rent but failed to deduct the TDS, then first, we need to understand the consequences of the same:
2.2.1 Consequences of non-dedication of TDS on rent paid:
- As per Section 201 of the Income Tax Act, 1961, any person who is liable to deduct TDS but has failed to do so shall be considered as an Assessee in default.
- Accordingly, the person shall be liable to pay the amount of TDS along with interest at the rate of 1% or 1.5% per month or part of the month.
- Further, as per Section 221, the Assessee in default may become liable to a penalty which shall not exceed the amount of tax in default.
- So, in case of non-dedication of TDS, the taxpayer shall be liable to pay the TDS amount, interest, and penalty.
2.2.1 Deposit the TDS Amount with applicable interest:
- Deposit TDS with interest: The Assessee has the option to deposit the applicable amount of TDS along with interest and file the Form 26QC.
- Recovery of TDS amount from Landlord: However, in such scenarios, the tenant may sometimes find it difficult to recover the tax amount from the landlord. Issues can arise if the property is already vacated.
- Crédito de TDS al arrendador: Tras presentar el formulario 26QC, el crédito de TDS comenzará a reflejarse en el formulario 26AS del arrendador. Sin embargo, para el año fiscal 2023-24 y años anteriores, el plazo para presentar una declaración de impuestos (ITR) rectificada ya ha vencido. En tal caso, al arrendador podría resultarle difícil reclamar dicho crédito de TDS.
Lea también: TDS sobre la venta/compra de bienes inmuebles
2.2.2 Obtenga los documentos necesarios del arrendador para evitar ser considerado contribuyente en mora:
- Según la sección 201(1) de la Ley del Impuesto sobre la Renta, un pagador no será considerado contribuyente en mora si el beneficiario:
- ha presentado su declaración de la renta conforme a la sección 139;
- ha incluido dichos ingresos por alquiler en su base imponible;
- ha pagado el impuesto adeudado sobre los ingresos declarados en dicha declaración,
- En consecuencia, el contribuyente debe recopilar los siguientes documentos del arrendador:
- Cálculo de ingresos del año correspondiente;
- Acuse de recibo de la ITR;
- Un certificado de un contador público (CA) que confirme que dichos ingresos se han tenido en cuenta al presentar la ITR y que se ha realizado el pago del impuesto correspondiente.
- No obstante, es posible que el inquilino aún deba pagar intereses desde la fecha de vencimiento del TDS hasta la fecha en que el arrendador pague su obligación tributaria.
2.2.3 La eliminación de la deducción por HRA no exime de la obligación
- Es pertinente señalar que eliminar la deducción por HRA de la declaración de la renta no exime al contribuyente de la obligación de retener el TDS.
- Si el pago del alquiler supera las 600 000 INR durante el año, el inquilino estará obligado a retener y pagar el importe del TDS.
- Por lo tanto, eliminar la deducción por HRA no es la solución.
3. Conclusión
Gracias a la inteligencia artificial y a las herramientas tecnológicas avanzadas, el Departamento de Impuestos sobre la Renta está bien informado sobre todas las transacciones realizadas por los contribuyentes durante el año. Los empleados deben asegurarse de cumplir debidamente con las disposiciones de la Sección 194-IB antes de solicitar la deducción por HRA. Además, para años anteriores, los inquilinos deben tomar las medidas adecuadas a tiempo para evitar que los avisos y mensajes del departamento fiscal se conviertan en notificaciones formales.
