How to get the refund of the excess TDS of 5% paid instead of 2% on rent

Individuals and HUFs making payment of monthly rent of more than 50,000 are required to deduct TDS u/s 194-IB. This TDS is paid in Form 26QC Challan-cum-statement. The same is required to be furnished by the tenant to deposit TDS on the payment of rent.

Now the Rate of TDS on the same is 2% w.e.f. from 1st October 2024. Earlier the same was 5%. Since the change came in the middle of Financial Year, many tenants were unaware of the same.

The Problem

Many Tenants have mistakenly deducted 5% TDS in Form 26QC instead of 2%, as the revised rate of 2% came into effect from 1st Oct 2024. However, despite deductors depositing 5% TDS, the deductees are receiving credit for only 2%. This these cases Form 26QC was filed allowing a 5% TDS deduction.

Now tenants have paid the TDS to the government, but same was not reflected as TDS Credit to the Landlord.

What to do in this case?

• Tenants can apply for TDS Refund for 3% Excess Tax in Form 26B Available on the Traces Portal.

What are the steps to file Form 26B?

Step 1 : Login to TRACES website and landing page will be displayed.

Step 2 : Click on “Request for Refund (For Forms 26QC)” ” under “Statements / Forms” tab

Step 3 : Before submitting the refund request go through the checklist and click on “Proceed”.

Step 4 : Select at least one of the mentioned reason for raising refund request then click on “Add Challan” button to proceed further.

Step 5 : Give challan details for which Taxpayer wants to claim refund.

Step 6 : Check Challan consumption details and click to “ I agree” for the declaration and click on Proceed.

Step 7 : Enter Bank Details and click on “Proceed” option.

Step 8 : Verification Page will be displayed and click on “Proceed” option.

Step 9 : Confirmation Page : Click on “Submit Refund Request” to continue TDS refund request.

Step 10 : After Click on Submit Refund Request button, a pop will be displayed on screen to validate the request through DSC (Digital Signature Certificate) or Aadhaar. Successful message will be displayed and click on “Preview and Print Form 26B acknowledgement” to get print of 26B acknowledgement.

Step 11 : Request will be available under “ Track Refund Request (For Forms 26QB/26QC/26QD)” and search refund status either through SearchOption 1, SearchOption 2or View All with remarks.