Allowability of TCS deducted on sale of property by two joint buyers -half each in assesment

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This discussion concerns the allowability of Tax Deducted at Source (TDS) when an immovable property is jointly purchased by two individuals under different PANs. Although TDS was deducted and reflected in Form 26AS for both buyers, the tax department only allowed credit for half the TDS, citing Rule 37AB. The query seeks clarification on how this rule restricts the full TDS allowability, especially when the property was sold by a deceased owner and the return is filed by a representative assessee.

vijai gupta

vijai gupta

(Querist)
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05 May 2023 An immovable property was sold by x to persons as joint owners and the TDS was deducted u/s 194IA OF I.T. Act. under two different PAN of joint buyers each and reflected as such in 26AS. However Deptt. has allowed only the portion of tds deudcted related to one one joint holder( 1/2 of TDS claimed) giving reference to provisions of Rule 37AB The portal also confirms no mismatch of tds claimed and the data of 26AS.
Need a guidance as to what way rule 37A restricts the allowability of full amount of TDS deducted in Assesment.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 May 2023 Section 199 of the Income Tax Act read with Rule 37BA of the Income Tax Rules inter alia states that if the income on which the tax has been deducted at source is assessable in the hands of a person other than deductee, credit of tax deducted at source shall be given to the other person and not to the deductee.

vijai gupta

vijai gupta

(Querist)
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10 May 2023 The reading of the Sec.199 of IT Act read with Rele37BA is clear,but how-come the allowance of TDS deducted in the hand of other person is restricted to 1/2 of total TDS deducted by the joint buyers of the house property. The fact is that the house property was in the name of wife who sold the property to the two buyers in joint name against their two different PANs In the meantime the wife expired and the husband filed the return as representative assessee . Now on assesment half of the total TDS has been disallowed giving reference to the said provision. I do not find anything to this effect in those provisions. Needa guidance asto this disallowance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 May 2023 Full TDS might have been allowed file rectification under section 154

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