TDS applicable on Pre-EMI payment by Developer to Home Buyer
14 February 2020
Is TDS applicable in the following case?
1) Pre-EMI payment to Home Buyer which is equivalent to their home loan Pre-EMI interest under Subvention Scheme.
For Example :
a) Customer "X" Purchased a House from Developer "Y" under subvention Scheme (Pre-EMI Interest will pay back to customer on monthly basis).
b) After Booking Customer will apply home loan and bank will disburse loan payment on construction schedule basis.
c) After bank disbursement customer will pay Pre-EMI to bank on monthly basis.
d) Developer will paid to customer equivalent to his home loan interest in every month.
Is developer required to deduct tds on monthly payment to customer? If yes, Under which section developer required to deduct TDS?