TDS on bank auctioned property

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When purchasing a property through a bank auction valued over £50 lakh, 1% TDS must be deducted on the full payment to the bank. The TDS should be filed under the original owner's PAN, as they are liable for capital gains tax. Although the bank acts as an attorney holder selling the property to recover dues, the tax obligation ultimately rests with the original owner, and their consent is not required for filing TDS.

Aliasgar B

Aliasgar B (Querist)
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19 November 2022 If a buyer purchases a property via bank auction which is greater than 50lakhs , he is liable to deduct 1%TDS on the full payment to the bank.

On whose PAN number should the TDS be filed against, Is it the PAN # selling bank or PAN# of the original owner of property.. and why so?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 November 2022 It will be in the PAN of the original owner as he is only liable for payment of capital gains tax.

Aliasgar B

Aliasgar B (Querist)
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20 November 2022 Thank you sir for your response to my query..
I have a further question to solidify my understanding..
The original owner is nowhere a party to the sale agreement between purchaser and bank.

As per Section 194-IA of the Income Tax Act, TDS has to be paid to the PAN number of payee. In this instance, it is the bank who is the payee, as mentioned in this sale certificate.
Doesn't that argument apply here?

Also is it okay to file a TDS on the pan number of the borrower without his consent ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 November 2022 That argument doesn't apply here. Bank is only selling the property in settlement of it's dues as power of attorney holder.
Yes, no consent is required as he is liable for capital gains tax.

Aliasgar B

Aliasgar B (Querist)
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20 November 2022 Thank you very much sir.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 November 2022 You are welcome....
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