tds on purchase of property

This query is : Resolved 

19 July 2016 hi , i have made an agreement to tell on 29 may to purchase a property and cut check dated 29 may. the check was cleared in 4 june from bank. should i require to pay the tax on 7th july or 7th June.

19 July 2016 7th June.

This TDS was earlier required to be deposited within 7 days from the end of the month in which it was deducted.

The income tax department has extended the time limit for depositing TDS on sale of property. Such TDS can now be deposited within 30 days from the end of the month in which it was deducted.

So if you have deducted TDS on property on 8th August 2016, you can deposit it by 30th September.

Do note that these rules apply from 1st June 2016.

Therefore, if any property payments are made before 1st June 2016, TDS will have to be deposited within 7 days from the end of the month in which it is deducted.

19 July 2016 thank you rajesh. but what is the solution now. i have deposited tax on 7th july without paying any interest or penalty as the check was not presented in may'16 and cleared in june only.

27 July 2025 You're in a fairly common situation, and itโ€™s good you're checking for compliance.

Letโ€™s clarify everything regarding **TDS on property purchase (Section 194-IA)**, your specific dates, and what the rules say.

---

## โœ… Your Case Summary:

| Action | Date |
| ------------------------- | -------------------------------------------- |
| Agreement + Cheque Issued | 29 May 2016 |
| Cheque Cleared | 4 June 2016 |
| TDS Paid | 7 July 2016 |
| TDS Amount | Not mentioned (assumed 1% of property value) |

---

## โœ… TDS Under Section 194-IA (as of your dates in 2016):

At that time, the rules were:

* **Before 1 June 2016:** TDS was to be deposited **within 7 days from the end of the month** in which **payment/credit** was made.
* **From 1 June 2016 onwards:** TDS on property transactions (Form 26QB) could be deposited **within 30 days** from the end of the month of deduction (as per Notification No. 30/2016 dated 29.04.2016).

---

## ๐Ÿงพ So what applies to you?

### ๐Ÿ“Œ **Cheque given:** 29 May 2016

But, TDS becomes applicable **on actual payment or credit**, whichever is earlier.

However, there is **debate** around whether a cheque handed over constitutes "payment" if it is not yet cleared.

But based on **tax interpretation** and **CBDT guidance**:

> The **date of handing over the cheque**, not clearance, is generally considered the **date of payment** for TDS purposes โ€” unless cheque is post-dated or subject to conditions.

So in your case:

* Payment is deemed to have happened on **29 May 2016**
* Hence, TDS was considered **deducted in May**
* TDS should have been **deposited by 7 June 2016**

---

## ๐ŸŸ  Issue:

You deposited the TDS **on 7 July 2016**, which is **one month late**.

---

## โš ๏ธ What does this mean?

You were **technically late** in depositing TDS. So:

* Interest under **Section 201(1A)** could apply:

* **1.5% per month (or part thereof)** for delay in TDS deposit
* For one-month delay: **1.5% of the TDS amount**

---

## โœ… What can you do now?

Since you deposited the TDS **without interest**, the CPC-TDS or Income Tax Department may:

* **Raise a demand** later under Section 201(1A)
* Show a **mismatch or default** in your Form 26AS or TDS dashboard

### โžค You can take a proactive step:

* Calculate **1.5% of the TDS amount**
* Pay it via **Challan 281** under Section 201(1A) (Interest)
* Keep the **challan copy** ready in case a demand arises

---

## โœ… Summary:

| Item | Answer |
| ------------------------------------ | -------------------------------------------------------------- |
| Was TDS late? | โœ… Yes (by 1 month, based on cheque date = 29 May) |
| Should you have deposited by 7 June? | โœ… Yes |
| Will interest apply? | โœ… Technically yes (1.5% of TDS) |
| What to do? | Either wait for CPC demand, or pay voluntarily via Challan 281 |

---

Let me know if you want help calculating the interest or generating the **Challan 281 format**.


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