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194ia - tds on purchase of immovable property


Is GST to be considered in definition of consideration value for Rs 50 Lacs limit.

Flat value without GST: Rs 49 Lacs (below 50 Lacs)
GST: Rs 5 Lacs
Flat Value including GST: Rs 54 Lacs

Here Flat value (without GST) Rs 50 Lacs. So is TDS required to be deducted ?

If there is any circular clarifying this, please share the circular number.


194 IA need not be levied on GST, because charge is on transaction value
(documented price).
Seems no circular is hosted.

Thanks Mr Warrier for the reply. While the TDS charge is on transaction value, but is TDS applicability also on transaction value ? My builder is not agreeing on deducting the TDS, hence I want a strong case to put forward my case. Any case laws on this will also suffice.

Section 194IA says consideration to exceed Rs 50 Lacs for TDS applicability.

As per CBDT Clarification, through Circular No. 23/2017 that if GST on services has been indicated separately in the invoice, then no tax would be deducted on GST component. Taking into light this clarification, if GST Portion is indicated separetly, you are not required to Deduct TDS on that Component.



Thank you Mr Sharma for this circular no. This is helpful. Any case laws specifically on Rs 50 lacs limits will really be appreciated

Section 194IA mentions that 'consideration' paid to transferor should exceed Rs 50 Lacs.

Is there any definition in Income tax Act or Indian Contract Act, which has reference (any circular/case law) stating that indirect taxes paid to transferor is not part of 'consideration' value

Experts, please help. Need a circular or case law or any reference from income tax act or Indian contracts act which states that taxes are not part of consideration value

Experts kindly help. Plain reading of Sec 194IA reads "... Person responsible for paying 'any' sum by way of consideration... " Here the word used is 'any' which can include taxes. Also there is a circular which states that TDS is payable even on 'reimbursement' . Taking both these into account, is TDS applicable in the above scenario.


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