Stories
Tenant Deducted TDS But Didn't Deposit: Can Landlord Still Claim Tax Credit?
- •Landlords can claim TDS credit even if the tenant deducted but didn't deposit the tax, provided they have proof of deduction.
- •The TDS amount won't appear in Form 26AS or AIS if not deposited, potentially causing a mismatch during ITR filing.
- •Section 205 of the Income-tax Act, 1961 (and Section 401 for 2025 Act) prevents taxpayers from paying the same tax twice.
- •Documentary evidence like rent agreements with TDS clauses, bank statements showing post-TDS rent, and Form 16A (if issued) are crucial.
- •Landlords should first ask tenants to deposit TDS and provide proof; if unsuccessful, they can approach income tax authorities with a record of communication.
Key Questions Answered
Yes, a landlord can still claim credit for the TDS if the tenant actually deducted it. Even though the missing deposit will not reflect in Form 26AS or AIS, the law protects taxpayers from paying the same tax twice under provisions like Section 205 of the Income-tax Act, 1961, or Section 401 for tax years governed by the Income Tax Act, 2025.
To support a TDS credit claim when a mismatch happens, landlords should retain the rent agreement featuring the TDS clause, bank statements showing net rent received after deductions, and Form 16A if it was issued by the tenant. Maintaining a written communication record with the tenant can also help establish that the tax was indeed deducted.
The landlord can initially request the tenant to deposit the TDS and provide the relevant certificate and deposit proof. If the tenant does not correct the default, the landlord can approach income tax authorities through proper jurisdictional or grievance channels while keeping written records of their communication.
