Tds on cancellation of booking of flat

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CA Harshit Rathi (Querist)
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28 November 2016 My client is a pvt ltd real estate company. It has recvd advance against sale of flat. the buyer has deducted tax on it. now the buyer is cancelling the deal. i want to know what would be the treatment of tds on cacellation which the buyer deducted !!

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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28 November 2016 TDS refund provision is made in a form no 26B. This form needs to be filed with the A.O. This form is jurisdiction based, and the assessee has to file refund application under whose Jurisdiction the TAN falls. But while depositing TDS U/s. 194IA there is no mention of TAN so it is not clear whether 26B is applicable for claiming refund of tax paid U/S 194IA. And its applicable, to whom such application is to be made

1)To the A.O of property purchaser.

2)To the A.O of property seller.

And seller also cannot claim the refund because As per sec 199 the credit of TDS can be claimed by Deductee only when he will offer the said income for taxation. Since the deal is cancelled he can’t offer said income for tax and in effect can’t claim the credit of TDS.

CA Harshit Rathi

CA Harshit Rathi (Querist)
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28 November 2016 Thanks for your advice

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 November 2021 CBDT has vide notification No. 45/2017 notified that claim for refund of TDS paid can be furnished by the deductor in Form 26B electronically under digital signature or verified through an electronic process.
It further specified that in TDS Return in respect of TDS deducted Under Section 194IA for which Form No. 26QB has been filed by the deductor to claim refund of TDS , deductor has to mention his PAN , period can be left blank and has to furnish acknowledgement number of Form No. 26QB.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)

Notification No. 45/2017

New Delhi, the 5th June, 2017

INCOME TAX

G.S.R. 554(E).—In exercise of powers conferred by section 295 of the Income Tax Act, 1961 (43 of 1961) (hereinafter referred to as the ‘Act’), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (11th Amendment) Rules, 2017.

(2) They shall come into force on the date of their publication in the official Gazette.

2. In the Income Tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 31A, in sub-rule (3A), after the words “under digital signature”, the words “or verified through an electronic process” shall be inserted.

3. In the principal rules, in Form No. 26B, at the end of the form, the following shall be inserted, namely:-

“Notes: In case of refund related to tax deducted under section 194-IA of the Act for which Form No. 26QB has been filed by the deductor,-

(a) Permanent Account Number may be furnished in place of Tax Deduction and Collection Account Number;

(b) in column II, in sub-column (5) relating to the ‘period’, may be left blank;

(c) in column II, in sub-column (7) relating to the ‘Receipt number of relevant statement’, furnish acknowledgement number of Form No. 26QB.”

PITAMBAR DAS, Director TPL

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