Tds obligation - third party buyer in a jda
This query is : Resolved
Abhishek Viswanathan
(Querist)
30 September 2017
Hi Everyone,
I have a doubt with regards to S. 194-IA.
My client is planning to buy a house property from the builder which is more than Rs. 50L. The builder is giving 2 contracts -
1. For the transfer of land which belongs to the landowner (as a part of JDA) and
2. For the construction of the flat
The builder says that TDS is required to be deducted only on the land value and no TDS on the construction value.
Is this correct? Will the construction amount to S. 194C rather than S. 194-IA?
I have a doubt with regards to S. 194-IA.
My client is planning to buy a house property from the builder which is more than Rs. 50L. The builder is giving 2 contracts -
1. For the transfer of land which belongs to the landowner (as a part of JDA) and
2. For the construction of the flat
The builder says that TDS is required to be deducted only on the land value and no TDS on the construction value.
Is this correct? Will the construction amount to S. 194C rather than S. 194-IA?
CA R SEETHARAMAN
(Expert)
01 October 2017
This is not correct. For deduction under Sec 194IA, there is no concept of UDS or construction cost or underconstruction flat. The TDS needs to be deducted on the amount you are going to pay to the developer/builder for the flat as per the agreement.
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