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TDS on real estate Transaction with three sellers and each will receive sale consideration

Nikhil Joshi (Chartered Accountant) (54 Points)

18 August 2021

I am going to buy property which involves three sellers ( at the time of signing agreement only two will sign since one person has handed over Power of attorney in the name of another seller, mother to his son ) and total consideration is INR 1.18 Crore. Also, there are two buyers ( myself and my wife with equal share ) so in such case each seller will receive sale consideration of INR 39.33 Lacs respectively so do i need to deduct TDS under section 194 IA here? I am referring to judgement by ITAT in

M/s. Oxcia Enterprises Private Limited Vs DCIT (ITAT Jodhapur) but i got bit confused here, kindly help to understand. Thank you.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178226 Points)
Replied 18 August 2021

Though it is very tricky issue, and some judgements are in favour of the issue (i.e. No TDS in case of value of each seller being less than 50L), because the wordings of the act are in its line.

But the intention of the act is quite different.

Secondly, each individual seller is not entitled to sell a common property, independently.

In nutshell, if you gain anything extra benefit, by purchasing future litigation, you may proceed with the judgement.

But we do not advise to our clients!!

n my opinion also, the Section is not owner specific. . Can each joint owner dispose off his share in the property separately ? Answer is-No. . In such a case the cost of immovable property becomes the criteria for TDS. For such a property, payment made to each co-owner is liable to tax.

Read more at: https://www.caclubindia.com/experts/tds-u-s-194-ia-in-case-if-joint-owners-1336119.asp

Can each joint owner dispose off his share in the property separately ? Answer is-No. . In such a case the cost of immovable property becomes the criteria for TDS. For such a property, payment made to each co-owner is liable to tax.

Read more at: https://www.caclubindia.com/experts/tds-u-s-194-ia-in-case-if-joint-owners-1336119.asp

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