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Discount received on purchase of a flat

Nitin Sharma (Others) (26 Points)

25 July 2011

Hi,

I have purchased a flat from a builder (seller) through a broker. I was promised a discount by the seller.

I did receive the cheque of the discount but there was a deduction of TDS (10% of the discount amount). Broker has also issued me the TDS certificate and this is also reflecting in my form 26AS statement (Under Section 194H).

Now should i file for a refund in my return? As far as i understand, this should be deducted from the cost of the flat.

Kindly guide.

Thanks,

Nitin

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3 Replies

C.A SHASHANK GOYAL (Chartered Accountant) (362 Points)
Replied 25 July 2011

Hi, in my opinion you should now file a return for a refund as amount of tds has already been deposited with the income tax department as evident from form 26AS.

Discount can be one of the form of commission and the commission is duly covered under section 194h . Since in your case to the extent i have been able to understand discount have been given sometime after the flat has been purchased , if it would have been given at the time of purchase itself then it would have been deducted from the cost of the asset.

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