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.
- 房东的 TDS 抵免：提交 26QC 表格后，TDS 抵免额将开始在房东的 26AS 表格中显示。然而，对于 2023-24 财年及更早年度，修订后的所得税申报表（ITR）提交截止日期已经过去。在这种情况下，房东可能难以申请此类 TDS 抵免。
延伸阅读：不动产买卖中的 TDS
2.2.2 从房东处获取必要文件，以避免被认定为违约纳税人：
- 根据《所得税法》第 201(1) 条，如果收款人符合以下条件，付款人将不会被视为违约纳税人：
- 已根据第 139 条提交了所得税申报表；
- 已将该笔租金收入计入其应纳税所得额；
- 已就其在申报表中声明的收入缴纳了应缴税款，
- 因此，纳税人需要从房东处收集以下文件：
- 相关年度的收入计算表；
- ITR 回执；
- 由特许会计师（CA）出具的证明，确认在提交 ITR 时已考虑该项收入并已缴纳相应税款。
- 然而，租户仍可能需要承担从 TDS 应缴之日起至房东缴纳所得税之日止的利息责任。
2.2.3 取消 HRA 申报并不能免除义务
- 值得注意的是，从所得税申报表中删除 HRA 申报并不能免除纳税人扣缴 TDS 的义务。
- 如果年度租金支付超过 60 万卢比，租户就有义务扣缴并缴纳 TDS。
- 因此，删除 HRA 申报并非解决方案。
3. 结论
借助人工智能和先进的信息技术工具，所得税部门能够充分掌握纳税人在一年内进行的所有交易。员工在申请 HRA 扣除之前，必须确保严格遵守第 194-IB 条的规定。此外，对于往年情况，租户需及时采取适当行动，以免税务部门的提醒和通知演变为正式的处罚通知。
