X applied for purchase of an immoveable property from a reputed company say Ansals. The total value of the property is Rs. 60 lacs. As per terms, certain amount is payable by X to Ansals on allotment and some payments are required to be made within specified period say within 145 days. Such payments are about 30% of the total value of the intended purchase i.e. Rs. 18 lacs. The balance payments are construction linked and shall be payable in instalments as and when the construction activity shall start. X transfers this allotment to Y say for Rs. 20 lacs.(against Rs. 18 lacs paid by X to Ansals). After the allotment is transferred, Y will be liable to pay the remaining amount of Rs. 42 lacs to Ansals in accordance with the construction linked demands as and when raised by Ansals. Based on the above facts, I need the advise on the following: 1. What is the sale consideration between X and Y? 2. If tax is required to be deducted on payment of Rs. 18 / 20 lacs by Y to X, under section 194 IA of Income Tax Act. ? In my view, sale consideration in this case between X and Y is less than Rs. 50 lacs, no TDS is required to be made. 3. If TDS shall be required to be made on future payments by Y to Ansals as in that case, the consideration between Y and Ansals shall be only Rs. 42 lacs which is less than Rs. 50 lacs. Rgds. Vinod K Arora # 9918556688
30 May 2015
1 Total value of the property, Rs 60 lacs is the sale consideration. 2 TDS is required to be made on each payments. 3 Total consideration is exceeding 50 lacs.
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