Rental advance attracts TDS

QI am working as a professor in a Government College in Khammam. My college issued me a Form 16 indicating the salary paid to me during FY 2018-2019 (AY 201920). Based on that I filed my income tax return two months back using ITR-1 online as I didn’t have any income other than this. I have not sent the ITR-V as of now, as four months time was allowed. As per the Form 26AS which was uploaded recently indicates less salary paid to me but more TDS deducted. Thus there is a mismatch between Form 26AS Statement and Form 16.

Kindly advise as to what I should do? I can ask my college authorities to reconcile the difference but it may not be effected immediately. Shall I dispatch the ITR-V now or shall I wait for some more time and send it later in the hope that the reconciliation will be effected? If the reconciliation is not effected within the next two months, when am I to send the ITR-V, as the time limit is only 120 days? Kindly advise me in the matter. A person liable to deduct tax on any income by way of rent for use of building, furniture etc., exceeding `2,40,000 during the financial year will, at the time of credit of such income to the account of the payee or at the time of payment

A) Your sending of ITR-V now or little later will not matter. However, after reconciling your Form 26AS statement with Form 16, you are advised to file a revised return if there exists a genuine error regarding the details of income which persisted during the filing of original return. However, if there is no error from your side, you may request the college authorities to revise the e-TDS return filed by them. You may make a note that a revised return can be filed at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier i.e., the return for AY 2019-20 may be revised only upto a maximum of March 31, 2020.

Q■ MANAK DAS Khammam

I have leased out an apartment in Gurgaon on a long-term basis to a company from Hyderabad. Recently I have requested them to give us the rental income for approximately four more years. They say that if they pay us the rent in advance for this period, they will be charged 33 per cent by the incometax authorities. Their accounting year is April 1 to March 31 of each year. Would this be correct? A. KRISHNAN Via email

A) As per the provisions of Section 194 I, any person liable to deduct tax on any income by way of rent for use of building, furniture etc., exceeding `2,40,000 during the financial year will, at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier deduct income tax at rate of 10 per cent. Hence, advance rent paid will attract provisions of Section 194I. The rate of TDS applicable shall be 10 per cent and not 33 per cent as mentioned by you in your query. It is suggested to accept refundable deposit instead of advance rent to avoid the TDS provisions being attracted.

(The writer is a Hyderabad-based chartered accountant. Please send your queries to info@rathiandmalani.com)

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