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Tds on property sale @ 1 under section 194 ia

Sanjeev Kumar (GM-Contracts & Risk) (28 Points)

20 April 2016

I am willing to sell my flat for rs. 68 lacs. now buyer need to deduct rs. 68000 from the payment to be made to me. now my questions are:

1. in the sale agreement total agreement value will be 68 lacs or (68 lacs minus 68000)

2. buyer says that he will pay me full 68 lacs and i can pay the TDS and give him copy of TDS certificate. Is it possible and lawful?

3. i am salaried and paying tax on that after all possible deductions/ exemptions. this flat is being sold after 10 years of buying it. since the gains from this transaction will be exempt from IT under LTCG coz i will be reinvesting it in buying another flat, can i claim it back?

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3 Replies

Shailendra (Consultant) (36 Points)
Replied 25 April 2016

1. 68 lakhs

2. No. Buyer needs to deduct that 1% TDS and pay to Govt via Form 26QB, and give you Form 16, which you can claim in your IT return.

3. Yes. As I said above, the form16 will be proof of your tax paid, which you can adjust in your total tax liability as filed in your IT return

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Sanjeev Kumar (GM-Contracts & Risk) (28 Points)
Replied 25 April 2016

Dear Shailendra,

Thanks for your inputs.

As informed by you that Agreement will be for a lavue of 68L. As a practice, receipt of this amount (68L) is also put as a part of agreement (annexure). But I will be receiving from the buyer only 67.32L. and for balance 0.68L, I will get the challan. In this situation, shall I give hime a receipt of 67.32L or 68L. If 68L, it is not true as I have received only 67.32 L.

Request your response.

Shailendra (Consultant) (36 Points)
Replied 25 April 2016

receipt of 67.32 L. Challan details can also be mentioned in the sale deed if the tds is already paid. I suppose the advocate preparing your sale deed would take care of all this..