1% TDS aplicability when purchasing property by DRT

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This query is : Resolved

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A buyer purchased a property worth £90 lakhs through a DRT auction and is unsure about deducting 1% TDS. While the Income Tax Act mandates TDS on property sales over £50 lakhs, the buyer's bank (DRT) is refusing to allow the deduction from the auction price. The discussion clarifies that typically, the purchaser is responsible for bearing the 1% TDS if the seller (or bank in this case) objects to the deduction, especially since the SRO requires TDS payment for registration.

Rao Pyla

Rao Pyla (Querist)

18 October 2023 I have purchased a property of worth 90 Lkhs from DRT Auction.As per TDS On Sale Of Property above 50 Lakhs i have to deduct 1 % tax and deposit to IT department on behalf of Seller.Banker(DRT also) is not allowing to deduct 1 % tax from auction price.

is there any exemptions for 1% income tax deduction under TDS On Sale Of Property by DRT Court.

Thanking you in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 October 2023 No exemption deduct 1% in the name of the owner of the property.

Rao Pyla

Rao Pyla (Querist)

19 October 2023 Thanking you Sir for your quick reply,

here the owner means Bank(DRT)/Defaulter.plz clarify.

Iam paying to the bank as per E-Auction conducted by DRT.

Some sources are telling that in the public auction conducted by DRT.It is not required to pay the 1%

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 October 2023 It's only defaulter. You can also not to deduct if objected by bank.

Rao Pyla

Rao Pyla (Querist)

20 October 2023 Thanking you sir,

But SRO not registring site in my name without paying 1% TDS.

as per IT Act 194-IA section also it is the responsibility of the purchaser to pay the 1% IT dept.9for above 50 lakhs transactions)

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 October 2023 In such a case of the bank is not acceptable for 1% reduction you have to bear the 1%.

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