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"tds on purchase of property" from home loan

15 December 2015

I have purchased an under construction property worth Rs.2.9Cr

Have paid 10% i.e. rs 29 lacs from my resources till now, balance is being released by my bank against my home loan to the builder. bank is releasing full amount to builder, am I liable to pay 1% TDS on these amount too ? Or should the bank release 99% to developer and balance 1% to me to be able to deposit in TDS account of developer? Currently they are releasing full amount to developer.

I hope I am not be penalised for NOT depositing TDS on purchase on property under the above circumstances.

Request experts to please guide me on this issue.

Thanks.

Sanjeev kapur

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1 Replies

Deepesh Jhawar (Chartered Accountant) (41 Points)
Replied 16 December 2015

According to section 194IA, the responsibility for deduction of tax at source is of the transferee of the property.

"194-IA. (1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon."

Since, you are the transferee of the property, the liability for TDS is upon you and not the bank.