Tds on property

This query is : Resolved

sanjay (Querist)
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08 January 2014 Hello All
Happy New Year
I am an accountant and working in a pvt ltd co. My co has purchased a property for a consideration of Rs6000000/-. The TDS on property has been deposited by the seller of the property, but according to the law, we have to deposit the same.
Is this amount can be taken as the expense or the value of property to be increased?
Can we claim the amount of TDS in our return?
Kindly reply.
Regards
Sanjay

CA TSR

CA TSR (Expert)
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08 January 2014 The Finance Bill 2013 has proposed that purchaser of an immovable property (other than rural agricultural land) worth Rs 50 lakh or more is required to pay withholding tax at the rate of 1% from the consideration payable to a resident transferor. i.e. The person who purchases the property is liable to deposit the TDS on property value. The amount payable to land owner is after net off of TDS only. Hence there is no need to treat the same as your own expenditure.
Example:
Land consideration ; 60 lakhs
TDS as per IT ACt : 1% on 60 lakhs = 60,000
Net amount payable to owner : 59,40,000

As per your books:
Land a/c. 60,00,000
To land owner a/c. 59,40,000
To TDS payable a/c. 60,000

Land owner a/c. 59,40,000
TDS payable a/c. 60,000
To Bank a/c. 60,00,000

There is no expenditure to record in your books

AS per above discussion i Think your query is resolved.