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Property tax on property value above 50 lakhs

Raghunandan (Lead) (25 Points)

14 June 2016

I have jointly purchased a property above 50 lakhs in the month of Jan 2013 [registration happened on 5th May 2013] doing an initial self payment of 7 lakh rupees from 14 Jan 2014 till 01/June/2013. After that I have been doing regular payments as per builder demand by SBI home loan. Recently in April 2016 I received an intimation from TDS department "CPC (TDS) Follow up: 26QB Statement not yet filed for Purchase of Property during FY 2013-14". I called TDS department and the CSR told I am not liable to pay anything since I purchased the property before 1 June 2013. I am confused on whether I am liable or not, since there is heavy penalty on late payment and interest too. Please help me resolve the issue.

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SUPRIYA (PRACTICE) (853 Points)
Replied 14 June 2016

TDS on immovable property u/s 194IA is applicable on sale of immovable property is consideration is fifty lakhs or above. This section is effective from 1.06.2013. It will apply in following cases:

1. Agreement entered befor 01.06.13 but registration and payment made after 01.06.13

2. Agreement is entered before 01.06.13, it is registered before 01.06.13 but payments are made after 01.06.13

3. Agreement entered registed after 01.06.13

As you said you have paid your agreement have been entered in Jan 13 and registered on 05.05.2013 but you are paying as per builder demand also after 01.06.13 and your consideration being 50 lakhs.

Yours is an ongoing project (assuming your agreement provided part payment on demand ) and hence on payments made after 01.06.13 TDS will be deductible.

This is my opinion if any one else have any other opinion please let me know

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CA Brijendra Tripathi (Consultant) (142 Points)
Replied 18 June 2016

Yes, You are liable to deduct TDS @ 1% on Payment made to builder on or after 01.06.2013 u/s 194IA.

Thus you have to pay demand with interest.

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Raghunandan (Lead) (25 Points)
Replied 18 June 2016

Thank you Supriyand Brijendra ! Builder is ok to pay the TDS amount as per the explanation above. However now the issue is late payment penalty and interest on late payment is there. He will tell me to bear the expenses, while my point here is that I didnt have any idea about payment of TDS to government on flats above 50 lakhs. I reaslised only when I received a notice from TDS department. Earlier the builder didnt notify me that I have to pay him deducting 1 %.

Please suggest what can be done here.

CA Brijendra Tripathi (Consultant) (142 Points)
Replied 20 June 2016

You just pay the TDS Amount alongh with the details file the form26QB. After thenecessary compliance if any notice is received you should represent your case before AO to drop the proceedings of Penalty & Interest.

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