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TDS deduct on purchase of immovable property

mahendra sahoo (Gst Practicion) (700 Points)

28 March 2022

Hi all
Purchase of one land & building value amount of Rs 5 crore to be paid to seller by cheque. but its guidline value (govt municipal value) to be registered the property is 6 crore. Now my query is which value to be considered for Tds deduction?

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8 Replies

Rahul Jalan (Chartered Accountant) (121 Points)
Replied 28 March 2022

This issue is addressed by the finance bill 2022, wherein it is proposed to amend section 194-IA to state that TDS would be deducted on the sale consideration or stamp duty value whichever is higher. so if the transaction would take place on or after 1 April 2022, the TDS would be deducted on stamp duty value of INR 6 crores being higher than the sale consideration.

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Eswar Reddy S (CFO- at NHTF) (58275 Points)
Replied 28 March 2022

Value as per sale deed is to be considered for Tds purposes

sabyasachi mukherjee (27642 Points)
Replied 28 March 2022

Not only sale deed all expenses pertaining to put to asset to use is to be considered.
This is as per Accounting Standard.

Eswar Reddy S (CFO- at NHTF) (58275 Points)
Replied 28 March 2022

It's not capital gain to consider expenses on transfer but it is Tds on sale of house property..

Purchaser has to deduct Tds and the value should be as per sale deed

mahendra sahoo (Gst Practicion) (700 Points)
Replied 29 March 2022

If Tds deducted on 6 crore, the excess Tds credit benifit will get by seller? Right

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sabyasachi mukherjee (27642 Points)
Replied 29 March 2022

Accounting Norms is violated. Stamp Duty Value is ascertained not violating such norms. Do not segregate income tax from accounts. They are correlated.

Eswar Reddy S (CFO- at NHTF) (58275 Points)
Replied 29 March 2022

Excess credit goes to seller but seller has to pay huge tax on 1 crores ( 6-5)

mahendra sahoo (Gst Practicion) (700 Points)
Replied 21 April 2022

One doubt in here in Form 26qb filing, my actual consideration is on 5 crores which I have to pay before Tds deduction, Tds deduction column what amount to be put? and what amount to be pay to seller after Tds deduction, if benchmark value is 6 crores