TDS credit to landlord u/s 194I(B) in case 10% is deducted as opposed to 2% as per act.

[ROHIT GOEL]

Dear Professionals

TDS as per section 194I(B) is 2%, however in case 10% is deducted and deposited by filing Form 26QC then will entire benefit of 10% will be given to landlord in his Form 26AS or not?. There are reports that only correct rate (2%) benefit will flow to the landlord, despite tenant deducting and depositing 10% TDS. If that is the case, why is there no field check for TDS rate in Form 26QC and why is it allowing to file the form with 10% TDS rate.

AI Summary

TDS credit on rent follows tax actually deposited, even where Form 26QC shows an incorrect higher deduction rate.
Under Section 194-IB, rent paid by specified individuals and HUFs is subject to TDS at the prescribed rate and reported through Form 26QC. Where the tenant deducts and deposits tax at a higher rate than required, the amount deposited is still treated as TDS on behalf of the landlord, and credit is linked to the tax actually deposited and matched with the landlord's PAN for reflection in Form 26AS/AIS, subject to successful processing.