DEDUCTION OF TDS ON REFUND OF ADVANCE RECEIVED AGAINST SALE OF PROPERT

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anoop mehra (Querist)
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12 May 2026 A TAX PAYER RECEIVED ADVANCE AGAINST SALE OF PROPERTY. THE BUYER DEDUCTED TDS THEREON. NOW DUE TO DISPUTE, THE SELLER IS REQUIRED TO REFUND THE NET AMOUNT PLUS TDS DEDUCTED. IS THERE ANY LIABILITY FOR THE SELLER TO DEDUCT TAX ON THIS REFUND AMOUNT?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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12 May 2026 The seller is not required to deduct TDS on the refund amount. The refund is a reversal of a capital transaction. The buyer must approach the Income Tax Department via the TRACES portal to claim a refund of the TDS originally deposited under Section 194-IA.

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