I received an email from ITD about not deducting TDS on rent paid under HRA

TDS & TCS TDS Return Forms
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I have received an email from the Income Tax Department (ITD) regarding the HRA claimed in my ITR. The email mentions that I have not deducted any TDS on the rent amount paid. Here’s the exact message I received:

“It is observed that you have claimed an exemption for HRA under section 10(13A) amounting to ₹8,20,000/- and ₹7,00,500/- in your ITR for A.Y. 2023-24 and A.Y. 2024-25/- respectively. However, it appears that no TDS has been deducted on the rent paid as required under the TDS provisions u/s 194-IB. We kindly request that you verify this claim and rectify any mistakes by filing an updated ITR by 31.03.2025."

I was not aware that I needed to deduct TDS under section 194-IB when paying rent. What should I do now? Do I need to pay TDS, any tax, interest, or penalty? How can I correct this—should I file an updated return as suggested in the email?

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Hey @Kunik ,

You’re not alone, many taxpayers have received this email from the Income Tax Department (ITD) about their HRA (House Rent Allowance) claim and TDS on rent.

Why did you receive this email?

The ITD noticed two things:

  1. You claimed HRA in your Income Tax Return (ITR).
  2. No TDS was deducted on the rent paid.

They are specifically referring to Section 194-IB of the Income Tax Act, which requires individuals or HUFs to deduct 5% TDS if monthly rent exceeds ₹50,000. Since your records show a high rent but no TDS deduction, they’ve flagged this and sent you the email.

What are your options?

You have two ways to address this issue,

Option 1: File the TDS return (Form 26QC)

If your monthly rent was indeed above ₹50,000, you’ll need to:

  1. Deduct and pay :
  • 5% TDS on the rent paid
  • 1.5% interest per month (from the rent payment date till TDS payment)
  • late filing fee of ₹200 per day (capped at the total TDS amount)
  1. File Form 26QC online, along with that make the payment considering the TDS, interest and late filing fees calculated as above.

:bulb:Ensure your landlord’s PAN & Aadhaar are linked. If they aren’t, the TDS rate increases to 20% instead of 5%, which could result in a notice for short deduction.

After TDS is paid and reported, your landlord can file a rectification request to claim refund of the TDS amount.

Option 2: File an Updated Return (ITR-U)

If you’ve incorrectly claimed HRA you can:

  • File an Updated Return (ITR-U) for the relevant assessment years.
  • Recalculate your HRA as per the income tax rules.
  • Pay any additional tax along with the applicable penalty under ITR-U.

You have until 31st March 2025 to file an updated ITR. It’s best to act early to avoid further interest or penalties.

We also made a detailed video covering more nuances around this.

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A close relative recently received an email from the Income Tax Department about their ITRs for AY 2024-25 and earlier . They were paying around 60K/pm in rent to their landlord that they claimed as a deduction but were not aware that TDS has to be deducted on rent payments above 50k/pm.

What can be done to redress the issue now ? They can pay the applicable TDS with penalty and interest but how will the landlord claim the TDS deposited in their favour since his return cannot be updated now ? Won’t this amount to taxing the same income twice - once in the hand of tenant and once in the hand of the landlord ?

Any practical advice would be greatly appreciated.

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Hello @RanS

Yes, there are a lot of taxpayers who have received this email from ITD.

As per the Income Tax act, if you pay rent more than 50k per month, you need to deduct TDS at applicable rate and file TDS return.

In the current scenario, we have a possible solution as below:

  1. Pay TDS (along with interest and late filing fees) and file TDS return 26QC for the years for which rent payment was more than 50k per month.
  2. File a rectification request for the assessee to whom the rent is paid to claim TDS refund for that particular FY.

We can help in filing the same. In case you need our experts to file it for you, you can book a slot using the below link:

Book a slot

Thank you.

6

Hello All
One of my friends has not deducted TDS on home rent for past 3 years by lack of awareness. He received as email from income tax for updated filing. Please suggest

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Hello @VSP

As per Income Tax Act, if you are an individual and pay rent more than 50k per month, you are liable to deduct TDS at 5% and file TDS return 26QC.

We can help you to file TDS return for the previous 3 years. Interest at 1.5% per month on the TDS amount and late filing fees of 200/ per day capped at total TDS amount will be levied.

You can book a slot using the below link:

File form 26QC

Thank you.

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Hi
I was unaware that we need to deduct and deposit TDS on Home rent. Now, I got an email form it dept that for my last 3 assessment years HRA was claimed but TDS was not filed. It said to verify this claim and rectify any mistakes by filing an updated ITR by 31.03.2025.
I was using Cleartax Expert assistance for my Taxes for these last 3 years and not once any of their CA reminded me of this.
Also Landlord (Father) has shown the rental income in his last 3 IT returns, should the TDS still be filed ?

What should i do now ?

  • Do i need to file TDS for the last 3 Assessment years now ? Will it incur any penalty ? If so how much would that be ?
  • I was paying 58500/- rent per month in the FY 21-22. What should i pay here now ?
  • After filling these TDS do I need to Re-file my ITR for these years ?

Thank you

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Hello @abhishek_reddy_aluri

As per the income tax act, you have to deduct TDS at 5% of rent amount if the amount exceeds 50k per month.

Here, the ITD have sent an email to all taxpayers who have shown rent paid more than 50k and claimed HRA but not filed TDS return.

In our opinion, we recommend you either of the 2 options below:

  1. File TDS return for all the 3 years with interest and penalty. (Interest is 1.5% of TDS amount per month and penalty is 200/ day). You can file rectification request for your father for all the years and claim TDS refund.
  2. This is just an email communication. Wait for the ITD to send a formal IT Notice and then you can file TDS return. Since you have paid the rent and your father have disclosed the income in ITR, there is no loss of revenue to the government.

Hope, this helps.

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Thanks for the reply.

But can my father file a Rectification now for last 3 assessment years now ?
I heard from a local CA that ITR U cannot be filed if taxable income decreases and no refund will be issued.

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Hello @abhishek_reddy_aluri

Yes, that is true that ITR U can be filed only if you have not reported income earlier and there are tax dues and not for refund.

But filing a rectification request is not filing ITR U. It is a request submitted till 4 years from the end of AY if you forgotten to claim any TDS / TCS credit.

Thus, you can file the same.

We can help you to file TDS return as well as rectification request.

Thank you.

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Thank you.

How do i book a call/consultation to help me File TDS return and rectification request ?

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Hello @abhishek_reddy_aluri

You can book a slot for filing a TDS return using the below link:

File TDS return 26QC

Thank you.

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@AkashJhaveri What if someone is paying exactly 50000 as the rent per month. I feel there is a slight confusion as the wording is amount exceeding 50k. But there are news shown in various places that this is applicable to 50k as well. Please clarify this, so that I can You can book a slot for filing a TDS return if applicable.

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Hi,
Need some clarification on TDS to be deducted on rent paid. Can someone please help here.
I also recently received a msg from income tax department:

“It is observed that you have claimed an exemption for HRA under section 10(13A) of Rs 600774 and Rs 719748 in your ITR for A.Y. 2023-24 and AY 2024-25 respectively.
However, no TDS has been deducted on the rent paid. It is requested that the claim may be verified and any mistake, if found, may be rectified by filing the updated ITR by 31.03.2025.”

I have shown rent (of more than 50k per month in total) paid to my parents in total.
(Additional info:
My brother and I are both showing separate rents paid to our both parents. So, there are 2 tenants and 2 landlords in the picture.
They have shown both these rents in their income in ITRs. But after rebate, their tax came down to 0, for both the years.)
My questions are:
If rent paid to two landlords in total together is more than 50k per month, in such a case, is the above msg still applicable? Meaning, none of the landlords (my parents) have received a rent of more than 50k per month separately, even if I sum the rents paid by me and my brother, to our parents.
If it is not applicable, what could be the possible reason that I have received this msg? And now what is expected of me if this does not concern me?
If I am supposed to deduct TDS on rent paid, how do I proceed now for the last two AYs?
If there is anything else, that I need to know, please highlight it.
@AkashJhaveri @Sakshi_Jain

17

Can we update ITR-U second time ?
Last year I already updated ITR-U, I want to update it again

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Hi @Siva_Venkat

Yes, you can file ITR-U multiple times as well for the same Assessment Year within the time prescribed along with the payment of additional Taxes as provided in provisions of the Income Tax Act.

Thanks,
CA. Pulkit Garg

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Sir/Madam,
My friend paid 65000 per month (total 7.8 lakhs AY 2022-2023 ) but he did not deduct TDS (he was not aware of it). But landlord filed ITR mentioned HRA rental income.
Does he need to pay TDS now ?
Landlord ITR filing (with rental income) is not sufficient ?

I think, 5% TDS applicable on 780000 , it is 39000.
According to Income tax portal, Interest on 39000 is 14625.

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Late fee is 39000

Does he need to pay 92625 ( 39000 + 14625 +39000 = 92625) while submitting 26QC ?

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Hello @Siva_Venkat ,

Yes, your friend needs to pay the TDS amount, interest on TDS default and late filing fees while filing the form 26QC for AY 2022-23.

You can pay and file this 26QC as per the calculations on the income tax portal.

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Hello @Nishantbansal ,

Since your annual salary exceeds the basic exemption limit, you will need to file an income tax return. If your total income exceeds ₹7 lakh for FY 2024-25 (or ₹12 lakh for FY 2025-26), you will have a tax liability.

Your employer will also deduct TDS (Tax Deducted at Source) on your salary income accordingly.

As for the bonus income, it is treated as part of your salary, so TDS will be applicable to the bonus as well, just like it is for your regular salary payments.

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@Sakshi_Jain @AkashJhaveri Could you guys please help me as well with my doubt?