TDS on Immovable Property Purchase: A Guide

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This discussion clarifies the process of deducting Tax Deducted at Source (TDS) when purchasing immovable property. It addresses how to calculate the TDS amount, particularly when a bank finances a significant portion of the purchase price. The advice suggests excluding GST from the property value for TDS calculation and confirms that banks typically agree to retain 1% of the payment for TDS purposes.

Tripti Singh

Tripti Singh (Querist)
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01 November 2022 Hi All,
I recently purchased an immovable property-flat-value around 54 lacs. The amount is being finance by bank to extent of 70% and rest is paid by Downpayment of 30%.
Just wanted to understand when I deduct TDS how to arrive at the value on which TDS is to be deducted and how to pay 1% less since bank directly transfers amount to builder. Also please help understand GST and it’s implication while arriving at the value of property. Please guide them will deduct tax accordingly. Thanks, TS

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 November 2022 Deduct Rs 54000 as TDS. Ask the bankers to retain 1% towards TDS and pay it to you.
Deduct TDS including GST.

Tripti Singh

Tripti Singh (Querist)
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02 November 2022 When I check on Internet it says TDS is to be deducted at value excluding GST.Also if bank is making payment will they agree to pay 1% less and if they don’t agree how to adjust after entire amount is paid by bank builder. I mean how to ensure that TDS is paid simultaneously after 1% retainership

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 November 2022 Yes, bankers will agree for 1% retention and pay it to you for TDS payment.
You can exclude GST for TDS.
TDS can be paid after one or two days of loan payment.

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