Naidu sent the notice to the Lok Sabha speaker for further action as Gandhi is a member of the Lower House.
A complaint against Gandhi is already pending before the Ethics Committee of the Lok Sabha, chaired by BJP veteran L K Advani, after the speaker forwarded the same to it.
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"On examination, prima facie there is an issue of privilege," Naidu said while referring the privilege notice to the Lok Sabha speaker, the sources told PTI.
Yadav had alleged that there is a "breach of privilege" by Gandhi as he used derogatory words against Finance Minister and Leader of the House Arun Jaitley, by twisting his name.
"Dear Mr Jaitlie - thank you for reminding India that our PM never means what he says or says what he means. #BJPLies," Gandhi said, while putting out a video of the prime minister's speech against his predecessor and Jaitleys remarks made in Rajya Sabha.
The BJP member said the Congress President had "deliberately twisted" the spelling of Jaitley's surname to 'Jaitlie', which was "highly derogatory".
The Congress president, Yadav said, has deliberately misinterpreted the proceedings of Rajya Sabha in order to "malign the government, which constitutes an affront to the dignity of the House".
He also alleged that it is a deliberate attempt at vitiating the political atmosphere of the country.
Yadav had earlier sought to know what action was being initiated against Gandhi on his privilege notice, over which Naidu told the members in the House that the same was under his examination and he would take a view on it at the earliest.
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