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TDS u/s 194IA in case of Joint Ownership (varying from consideration amount)

19 September 2023

Hello ! I am facing issues with the following scenario:

In the case of a property purchased by a father and son with a 50% share each as per agreement.

However, the father has contributed 60% of the consideration and the son has contributed the remaining 40% through a bank loan.

I have the following queries:

1) How will the TDS be deducted for each buyer i.e. what should the total consideration value be shown for each: 60-40 or 50-50? (considering the property value is more than 50 lakhs).
2) Will this co-ownership cause any issues for the father in availing exemption u/s 54F?

Thanks.

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4 Replies

Ashwin Kumar (CA ipcc) (447 Points)
Replied 20 September 2023

1. doesn't matter what the contribution is the agreement states equal holding so TDS to be deducted equally for both.
2. father can avail exemption under section 54F as long as the new property value is equal to higher than the gross proceeds of his share of property which was sold and provided he satisfies the conditions of construction or acquisition as required by the section

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Samiksha Wagh (14 Points)
Replied 20 September 2023

Thank you for the reply.

Yes the father satisfies all the other conditions stated in 54F.

My only concern is that TDS arises at the time of making payment of sale consideration. So shouldn't that be as per consideration paid by each buyer?

Ashwin Kumar (CA ipcc) (447 Points)
Replied 20 September 2023

Yeah you can deduct TDS based on the consideration. doesn't matter of it's according to consideration or according to agreement as the buyers are relatives to each other it won't have any problems. The differences can always be settled without any tax implications

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