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194-ia penalty
I did not deduct tax at source u/s 194-IA as the seller was an old lady and I was told she is not liable to tax. She applied for PAN only for the specific sale of property transaction. I have now got a show cause notice from IT dept asking why I have not deducted and instructing me to remit the TDS with Interest and penalty. On enquiring from the old lady , she had filed ROI and shown the sale transaction. If I deduct tax now , it will be to the seller's credit . Now since the transaction is long over how can I recover this amount from her? Capital Gain tax is already paid for the consideration. How can mere non filing of TDS entail me to deduct again for a past transaction which has also been taxed?
Replies (1)
You need to submit all the relevant documents proving that tax has already been paid on the transaction by other party. Then, the tax authorities cannot demand tax from you. However, they may demand interest and penalty from you for not following the tds rules. But, in any case, they can not demand tds to be paid by you.
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