TDS not detucted on commercial property

[Venkat]

Dear Sir,

I am the landlord Commercial property is given for rent and rent is less that 20lakhs per annum and doesn't comes under GST. My tenant has not deducted TDS and saying that they have not received TAN from past 1 year. Tenant is saying TDS will be deducted from Apr 26 as they received TAN in month of mar 26. Please clarify ....

1) Will there be any problem from Income tax as the TDS is not deducted and full rent is received by me. Shall i pay 10% TDS with interest in the TAN number of the tenant.

2) How can i show the rents received while filing income tax returns?

Under which category?

Thank you sir,

Regards,

K.Venkat

[YAGAY andSUN]

Non-deduction of TDS by the tenant does not shift the statutory liability onto you. Under Section 194-I of the Income-tax Act, 1961, the obligation to deduct TDS on rent (generally @10% for land/building, subject to threshold) rests solely with the payer (tenant). Failure to obtain a TAN or to deduct/deposit TDS attracts consequences for the tenant under Sections 201(1) and 201(1A) (being treated as assessee-in-default and liable for interest). You, as landlord, are not required to deposit TDS on their behalf, nor can you do so using their TAN. However, as per Section 191, your obligation is to correctly report the rental income and discharge tax thereon; if full tax is paid by you, the tenant may avoid being treated as assessee-in-default (though interest may still apply).

For return filing, rental income from commercial property is taxable under the head "Income from House Property" (Section 22), provided you are the owner. You should report the gross rent received/receivable, claim the standard deduction @30% under Section 24(a), and also claim interest on borrowed capital, if any, under Section 24(b). TDS credit is not relevant here since none has been deducted. The fact that rent is below Rs. 20 lakh and outside GST has no bearing on income-taxability.

In summary, there is no adverse consequence on you for non-deduction of TDS by the tenant if you have correctly offered the income to tax; the compliance default lies with the tenant.

[Venkat]

Dear Sir,

Thank you very much sir for your valuable suggestion and given time for reading the query and clearly gave the suggestion with respective Income tax sections .

 

 

 

 

AI Summary

Rental income reporting and tenant TDS default under income tax law remain separate compliance obligations. Non-deduction of TDS by the tenant does not shift the statutory liability to the landlord. The payer remains responsible for deduction and deposit of TDS on rent under Section 194-I, while any default may attract consequences under Sections 201(1) and 201(1A). The landlord must report the rental income correctly and pay tax on it. Rental income from commercial property should be shown under the head Income from House Property, with the gross rent disclosed and the standard deduction under Section 24(a) and interest under Section 24(b), if applicable.