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TDS in the case of property loss

I am an employee of a public sector company. I have loss in respect of my income from a property which I had let out. I made a declaration of such loss to the Disbursing Officer. However, my DDO has declined to take into consideration the loss on the ground that such loss cannot be admitted in respect of let out property.

Sec. 192(2B) only bars any adjustment for loss "other than loss under the head income from house property for the same financial year". Loss from property can, therefore, be taken into consideration for tax deduction from salary income in Sec. 192 of the Act. No distinction is made between the loss on account of let out property and self-occupied property. Instructions are issued in the matter of TDS from salary by the Central Board of Direct Taxes year after year.

Circular No.12 of 2006 dated November 27, 2006 (2006) 287 ITR (St.) 120 clearly brings out this position making no distinction between let out and self-occupied property. Examples 7 and 8 annexed to the Circular would require loss from property income to be taken into consideration. Though these illustrations have taken into account loss from self-occupied property, it does not mean that loss alone is to be taken into account.

There are many such instances, where there is excess deduction of tax due to the reluctance of the DDOs to take any decision. Such excess deduction is not uncommon, so that there is work all-round, for the deductor to deduct when there may be no liability and file statements, employees to file timely refund claims and for the Income-tax Department to issue the refund.

The very object of TDS provision is to match tax deduction with liability. While the Income-tax Department takes action, where tax has been failed to be deducted, it does not try to educate deductors to avoid wrong deduction, where it is unnecessarily deducted.

S. RAJARATNAM

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