fakrudheen (Audit Assistant) (341 Points)
14 December 2015we are builder, we build flat and whole flat sell to a one of the housing society on a square feet basis, also they relasing payment on work progress, question is whather TDS Deducted or not by the housing society when relasing payment to builder
project receipt from housing society 20 crore
project duration 3 years
S. Shiroor
(Others)
(1207 Points)
Replied 14 December 2015
TDS will be deducted @ 2% by Hsg soc under sec 194 C.
fakrudheen
(Audit Assistant)
(341 Points)
Replied 14 December 2015
i think its sale, then how come it under the ambit of 194c
Ankit Taprania
(CA FINAL )
(542 Points)
Replied 14 December 2015
S. Shiroor
(Others)
(1207 Points)
Replied 14 December 2015
It is a Contract between two parties - the Hsg soc and the builder. The builder is not selling the flats seperately to different ppl. It is executing the work as per Contract. Hsg soc has hired the builder to build flats for their members. Hence TDS needs to be deducted u/s 194C. However you can take an opinion from a CA.
kiran chhabhaiya
(article)
(79 Points)
Replied 14 December 2015
aman jain
(Whatsapp group @ 9630455902)
(86 Points)
Replied 15 December 2015
fakrudheen, as stated by u the project duration is 3 years, and payment being relesed in installments by the builder. it depicts a case of works contact and not a outrisht sale of flats by builder. and hence HsgSoc is reqd to deduct tds u/s 194C @ 2%
S. Shiroor
(Others)
(1207 Points)
Replied 15 December 2015
The statement that services are on squarefoot basis and Soc releases payment on progress basis itself indicates that land belong to Society and it could be rehabilitation/redevlopment /new Construction. Vat on materials and service tax on labour is another issue. But TDS should be deduted @ 2% u/s 194C
CA Amit Prakash Sharma
(Chartered Accountant)
(92 Points)
Replied 16 December 2015
fakrudheen
(Audit Assistant)
(341 Points)
Replied 16 December 2015
actuallly its a banking staff, who incorporated a housing society and approch a builder, we wand some flats for our society members, that time builder & society prepare a MOU with deatils of number of flat, square feet & selling rate per square feet (including land), builder also find out land and register them to the society as security, also receive advance from society towards land cost, after land registering builder will prepare drawings & obtain permission from concerend authorities. next step builder & society prepare construction agreement and also prepare agreement for sales and construction with society member (purchaser), builder & society (tri parties)
quation is whether TDS applicable or not for society while releasing payment to builder
in builder concept its sale of flat to the society members through housing society
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