Tax Query: TDS on rent receivable – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/portfolio/personal-finance/tax-query-tds-on-rent-receivable/article38191622.ece

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I had rented out my shop in 2008. The tenant was deducting TDS from my rent and accordingly I was showing this in my ITR. Later on, there was a dispute and the tenant had been depositing the rent less TDS in the court and the court was paying me the rent. I continued to show the TDS in my ITR. As I was getting old, I settled the shop property in my son’s name in 2013 and informed the tenant. Since then the court has been paying the rent to my son. However, the tenant continues to deposit the TDS deducted from my son’s rent in my name (PAN). I have been reminding the tenant not to deposit in name. My advocate also sent a notice to this effect. But as of today also he continues to deposit the TDS in my PAN. Neither I can take the credit nor my son. Under these circumstances, please advise us the action to be taken.

As per section 203 of the Act, every person deducting tax at source is required to issue the withholding tax certificate to the payee in the prescribed form and within the prescribed timelines.With respect to taxes deducted on rent, tenant is required to issue Form 16C to the landlord within 15 days from the due date for furnishing the withholding tax return.Non-compliance in furnish certificate in form 16C shall have penal implications under section 272A of the Act. As the tenant is deducting taxes incorrectly under your PAN instead of using your son’s PAN you may proceed to file a letter with the Additional Commissioner TDS wing, describing the facts of the case along with relevant documents highlighting the default by the tenant and request to grant credit of taxes withheld in your son’s PAN.

For schedule AL of ITR -2: i) How data has to be filled in case of the tax- payer being a working married woman? ii) Is it necessary that the assets and liabilities data to be balanced as in case of a balance sheet? iii) What are the important points to be kept in mind and should one need to submit proofs for all? If so, what are all the necessary documents?

V V S Narayana

i) Special reporting norms have not been specified for female taxpayer (whether working or otherwise) in the tax forms. Accordingly, the value of assets held by the taxpayer (working married woman in the instant case) as on 31st March needs to be reported in the Schedule AL of the Income tax return.

ii) There is no specific requirement/ guidance on the balancing of assets and liabilities while reporting in schedule AL of the ITR 2

iii) The assets required to be reported in this Schedule include immovable assets viz. land and building, financial assets viz. bank deposits, shares and securities, insurance policies, loans and advances given, cash in hand, movable assets viz. jewellery, bullion, vehicles, yachts, boats, aircraft,archaeological collections, drawings, painting, sculptures, or any work of art, etc. Liability generally includes the loans and advances payable to the banks, financial institutions, or any parties.

It is recommended to keep the documentary evidence for the balances reported (assets and liabilities) while filling up ‘schedule AL’ in ITR 2 to address any audit or scrutiny query raised by the tax officer at a later date. The supporting typically includes invoices, bills, statement of purchase for mutual funds/shares copy of insurance policies, settlement deed, gift deed, purchase deed in case of immovable properties, bank statements, etc. Further, generally assets are reported at cost price in schedule AL of ITR 2.

The writer is Partner, Deloitte India

Send your queries to taxtalk@thehindu.co.in

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