TDS on sale of property (right) after allotment but before possession

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CA SVEMOH (Querist)
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22 February 2022 Hello

Should TDS @1% be deducted u/s 194IA if X is buying an under construction flat from Y for Rs 60 lakhs which possession is an year away . In your opinion, what Y is selling is his rights to acquire a property or the property itself ? The property title still vests with the builder before registry of the flat . Please share your insights.Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 February 2022 Yes, TDS applicable as property value exceeds 50 lacs. TDS has to be deducted on each progressive payments.
As soon as allotment and construction agreement is signed and progressive payments are made ownership vests with buyer. Registration is only a formality.

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