Kiresh Shivkar (Practicing CA) (44 Points)
11 June 2013Dear All,
As per the provision of section 194IA of the Income-tax Act, 1961, TDS is to be deducted @ 1% on the consideration for the purchase of immo at the time of credit or payment whichever is earlier.
Suppose, the Purchaser takes a loan from a bank to finance the purchase of immovable property. While disbursing the loan amount, the Bank would issue the cheques in the name of the builder/ sellor. Accordingly, in such a case how would the deduction of tax at source u/s 194IA would take place.
CA SAI SURYA TEJA
(Article assistant)
(31 Points)
Replied 11 June 2013
You have to ask the banker to deduct TDS on behalfof you and to remit the same to the government as if they remits the Tds For interest on FDs to the government.
R D Baliga
(SENIOR DIVISIONAL MANAGER)
(22 Points)
Replied 01 February 2014
Query
I have a query.
I have booked a flat at Bangalore in 2012. Total consideration is Rs62 lakhs, As on 31/5/2013 , I have paid Rs25 lakhs to the builder. Balance as on 1/6/2013 is Rs37 lakhs. Do I need to deduct tax on balance instalments payable to the builder. Some experts are of the opinion that there is no need to deduct as balance payable as on 1/6/2013 is less than Rs50 Lakhs. ( The building is still under construction and may be completed by 2015)
Kindly clarify
Thanks and regards
HARI PRASAD
(M.COM)
(172 Points)
Replied 05 February 2014
Dear Baliga,
In your case there is no need to to be deducted TDS because the notification itself said that when transaction or agreement or any some part amount would have been paid before 1.06.2013 for them this section does not applicable hence you would be out of this section.
CA.SKR
(CA; CS-Final (One Group); DISA (ICAI); Insolvency Professional)
(442 Points)
Replied 06 February 2014
Dear Mr. Baliga,
Since the consideration i.e. property value is more than Rs. 50.00 lacs and you have already paid a sum of Rs. 25.00 lacs before 1st June 2013, hence TDS @ 1% is to be deducted on balance amount of Rs.37.00 lacs (62 lacs -25 lacs) at the time of payment of each instalment.
CAclubindia
