Tds on purchase of residential immovable property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2014 Please inform the responsibility of buyer and seller.

Property value isabove 1 crores as per govt registration value. Buyer has paid an earnest amount of 40 lacs by cheque on 1-4-2014 to seller and final balance payment will be given at time of registration on 25-05-2014. Is TDS to be deducted for Rs.40 lacs or buyer can pay at time of final payment at time of property registration. What is buyers ans sellers responsibility and which forms are to be submitted by buyer and seller.

Soubhagya Kumar Patra

Soubhagya Kumar Patra (Expert)
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12 April 2014 As per provision under section 194IA, whenever payment is made in installments the buyer is required to pay the TDS on each payment. So here 1% has to be charged on 40Lacs. On final payment (assume 60Lacs), Rs. 60K of TDS can be paid at that time.

It is a buyer's responsibility to deduct the tax at the time of payment to the seller. Any delay in deduction/deposit of TDS will incur late payment and interest to the buyer.

Form 26QB has to be filed by the buyer from where he/she can make the tax payment online and then he/she has to register himself/herself in Traces to issue 16B certificate which has to be given to the seller as proof of TDS payment.

Soubhagya Kumar Patra

Soubhagya Kumar Patra (Expert)
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12 April 2014 Do let me know if something further needs to be clarified.

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