TDS not deducted on purchase of property

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    ASM-MEENU New Member

    We have booked property/purchase of flat from builder in year 2011 on instalment basis i.e. construction linked payment plan in joint name with 50% share each. Total cost is about Rs.61.0lacs including IDC.EDC, Parking & other facilities.
    After 01/06/2013 we have paid two instalments of total Rs.10.0 lacs approx. including at the time of possesion/final payment. Final payment was done in oct'2014, Possession was taken in oct'2015.

    Due to unawareness and not guided by builder, TDS was not deducted.

    Now What will be TDS ? How to go about it ?
    Builder is neither refunding nor depositing TDS part of 1% on our behalf. What to do ?
    For advise pl.
  2. Karan Batra

    Karan Batra Well-Known Member

    It is your responsibility to deduct the TDS while making the payment.

    You'll have to deposit this payment with the Income Tax Dept irrespective of whether the builder gives this amount back to you or not.

    ASM-MEENU New Member


    On how much amount we have to deposit TDS to Govt. i.e. TDS @1% on full amount of flat or 1% TDS on payments made to builder only after 01/06/2013 [i.e. not on payments made before 31/05/2013]. kindly clarify.
  4. ZED

    ZED Well-Known Member

    The provisions of S.194-IA came to effect from 1st June, 2013. Therefore, tax is not required to be deducted for the amount pertaining to the period prior to 1.06.13

    ASM-MEENU New Member

    It is also heard that in case of agreement signed with seller/builder before 01/06/2013 then TDS is not applicable, even payments are made after 01/6/2013. kindly clarify.
    Further in case of joints names, how TDS to be deposited.
  6. ZED

    ZED Well-Known Member

    Even if the agreement was entered into prior to 01.06.13 , the TDS provisions can apply because they have not been linked with agreement but have been linked with payment or the date of credit.

    If the credit to the accounts was made in the seller's account prior to 01.06.13 then there would have been no deduction.

    If you have read otherwise, kindly share the link from where you have read.
    Experts opinion may differ, I am sticking to mine unless their is conta submission on good grounds.

    In case of joint names, multiple form would be required.
    • If there are 2 sellers and one buyer ,then 2 form 16B would be required.
    • If there are 2 buyers and one seller ,then also 2 form 16B would be required.
    • If there are 2 sellers and two buyers ,then 4 form 16B would be required.

    194-IA. (1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon.

    (2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees.

    (3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

    Explanation.—For the purposes of this section,—

    (a) "agricultural land" means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;

    (b) "immovable property" means any land (other than agricultural land) or any building or part of a building.

    ASM-MEENU New Member


    ASM-MEENU New Member

    thanks for providing the information.

    Now i have to pay TDS to Govt about Rs.4000.0 [1% of Rs.4.0 lacs, amount paid after 01/06/2013]. The amount was paid on 01/10/2013 to builder.

    How much penalty and what will be late fee on TDS of 4000/-, if i deposit to next week of july'16.
  9. ZED

    ZED Well-Known Member

    Penalty is to be paid by you only if specifically asked by the department to pay , and not otherwise. Interest is payable.



    if any person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,—

    (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

    (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid,

    and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200:

    ASM-MEENU New Member

    ZED likes this.
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