TDS on Rent

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A landlord is seeking advice after their tenant incorrectly deducted TDS (Tax Deducted at Source) on rent for March 2020. The tenant credited the TDS to the government in April 2020, but the landlord only received the rent payment in April 2020, which falls into the next financial year. The landlord's attempts to resolve this with the unresponsive tenant have been unsuccessful. The advice given is that TDS is based on the accrual basis, not cash basis, and the tenant has correctly deducted it. The landlord is advised to file their Income Tax Return (ITR) based on the accrual basis for TDS, otherwise, their ITR may be deemed defective.

Iyaswamy Senthivel

Iyaswamy Senthivel (Querist)

30 August 2020 Form 16A shows a credit towards rent by my tenant for March 2020 on 31st March 2020 (FY 2019-20) itself and deduction of TDS and credit of the same to govt. on 27th April 2020. However the rent for March 2020 was credited to my account only on 7th April 2020 (FY 2020-21).
In spite of pointing out the mistake, he is unresponsive. What are the options for me to correct this?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

30 August 2020 TDS is not deducted on Cash Basis. It is to be deducted on Due/Accrual Basis. He has correctly deducted and deposited TDS on due basis.

Iyaswamy Senthivel

Iyaswamy Senthivel (Querist)

31 August 2020 But I have received the rent only in April 2020 and I submit my ITR based on bank statement and on cash basis all along. What is the solution?