Tds on immovable property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2015 Hello,

One of my clients has purchased bunglow from Builder. Whether he is liable to deduct TDS u/s 194IA ? Please guide me.

CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)
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29 May 2015 Yes. If the consideration exceeds rs. 50 Lacs. Then he should.

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2015 Whole payment has been made through loan. Now what he should do ?

The bunglow is owned by joint owners. whether both are required to file form 26QB ?

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CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)
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29 May 2015 Oh. Ok.
In that case, if th payment to each of the joint owners exceeds Rs. 50 Lacs, then only you need to deduct TDS.
Even if you pay it through a loan, you will have to deduct TDS. This is the position as of now.

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2015 In this case, who is gonna claim TDS ?

CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)
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29 May 2015 Let me make it clear through an example.

Let X & Y be the equal joint owners. They are receiving 60Lacs each. Then the buyer has to deduct TDS for both and file Form 26QB. hen they both can claim TDS on their enttlement.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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29 May 2015 Section 194IA talks about 'consideration' being more than Rs. 50 lacs so if total consideration paid for the property is more than Rs. 50 lacs TDS is required to be deducted by buyer. It doesn't matter if there are two joint sellers and each of them is getting half of purchase consideration . TDS is required to be deducted against their respective PANs even if their share in consideration is less than Rs. 50 lacs. Form 26QB is required to be filed by the buyer separately for both owners.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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29 May 2015 No it is not like that. It will be sufficient if the property consideration is more than Rs. 50 Lacs. Say for example a property is jointly owned by A and B and is sold by them for Rs. 60 lacs each of them getting Rs. 30 lacs as joint owners. TDS provisions will be applicable as property consideration is exceeding Rs. 50 lacs irrespective of their individual shares.

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CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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29 May 2015 in simple words if gross consideration on sale of properties exceeds rs 50 lkahs then irrespective of share of sellers buyer needs to deduct tds u/s 194IA