Tds on purchase of property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 November 2013 i have purchase a flat amounting to rs. 60 lacs with joint name. pls give advice about tds payment in account or otherwise

Nikhil Kaushik

Nikhil Kaushik (Expert)
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15 November 2013 If there are multiple buyers and share of each buyer in the property is less than Rs. 50 Lacs but the value of the property exceeds Rs. 50 lacs then provisions of section 194-IA will be applicable.

TDS will be deducted and deposited by each buyer in respect of their respective share in the property.

So each joint buyer should deduct tax against the payment made by him/her.

CA Pallav Singhania

CA Pallav Singhania (Expert)
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15 November 2013 Provisions of TDS on sale of Immovable Property (Sec 194IA) – as stated:-

The provisions of this section states that TDS on sale of Immovable Property should be deducted at source from payment on transfer of immovable properties (other than agricultural land) where the consideration paid or payable is more than Rs 50,00,000/-.

Earlier, there was no such deduction in case of immovable properties as it is in the case of salary, interest, rent etc. Any person responsible for paying to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), is liable to deduct tax at source under section 194-IA.Where the transaction is less than Rs 50,00,000 /-, the liability to deduct tax at source will not be applicable.

Rate at which TDS shall be deducted :- Tax is deductible at the rate of 1% of the consideration payable to a resident transferor. If a valid PAN is not provided by the seller, the tax rate would go up to 20%.

Obtaining TAN:-

Purchaser is not required to obtain a TAN for deduction. Payment and return of TDS :- Tax shall be deducted at the time of payment or at the time of giving credit to the transferor, whichever is earlier. If advance payment is being made then TDS would be required to be deducted at the time of advance payment itself.

And if installment payment is made, the TDS would be required to be deducted at each such installment.

The tax deducted shall be paid to the credit of Central Government within a period of seven days from the end of the month of deduction.

Read more at: https://www.caclubindia.com/forum/tds-on-sale-of-immovable-property-sec-194ia-simplified-268528.asp

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