The poll authority, acting on complaints received by it, issued notice to Rao and asked him to send a reply by 11:00 a.m. tomorrow.
According to the notice, the TRS chief had made certain derogatory remarks against Andhra Pradesh Home Minister Sabitha Indira Reddy while campaigning in Sircilla (Karimnagar) for the Assembly bypolls in the state on July 23.
Another complaint against Rao pertained to his reported remarks during a rally exhorting voters to "take money and liquor from the Congress and Telugu Desam, but vote for the TRS" made the previous day.
The Commission found that Rao's statement amounted to "abetment to a corrupt practice and electoral offence".
The Election Commission also issued notice to Andhra Pradesh IT Minister Komati Reddy Venkat Reddy for violation of the Model Code of Conduct by making promises on carrying out construction of roads and getting irrigation projects sanctioned.
"From the time elections are announced by Commission, Ministers and other authorities shall not make any promise of construction of roads, provision of drinking water facilities etc," states the Model Code of Conduct of the Election Commission.
Reddy has also been asked to reply to the notice by 11:00 a.m. tomorrow.