TDS Refund on Cancelled Property Purchase

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This query is : Resolved

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If you've paid TDS on a property purchase but later cancelled the deal, obtaining a refund can be complex. While the developer can see the TDS paid against your PAN, they cannot directly refund it. The main challenge is that the developer might have already accounted for this TDS in their filings. The consensus is that the developer, having utilised the TDS amount, is liable to repay it to you. However, there are concerns about potential discrepancies if a new buyer also pays TDS for the same property. It's advisable to discuss this with your CA and the developer to find a resolution, though reclaiming the TDS can be difficult once the challan is considered 'consumed'.

Mohit Landge

Mohit Landge (Querist)
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15 October 2024 I had purchased a flat and paid the required TDS. Afterwards, I filed Form 26QB and generated Form 16B. Unfortunately, due to unforeseen circumstances, I had to cancel the flat. Now, I'm trying to get a refund for the TDS amount I paid.

The developer can see the TDS against my PAN in Form 26AS but cannot claim or refund the amount from their side. Since a new buyer will also be paying TDS for the same property, it could lead to discrepancies in the developer's Income Tax Return (ITR). The developer assured me they would not claim the TDS I paid.

Is there any official process or way I can get a refund for the TDS amount paid, considering that Forms 26QB and 16B have already been filed? Any guidance would be greatly appreciated.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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16 October 2024 Refer: https://taxguru.in/income-tax/e-tutorial-request-26qb-refund.html

Mohit Landge

Mohit Landge (Querist)
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27 October 2024 Thank you for your response. I spoke with my CA regarding this matter, and he mentioned that the challan has been fully consumed, which means we cannot apply for a refund of the 1% TDS paid to the government on behalf of the developer.

Could you please advise if there is any other way to reclaim this TDS?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 October 2024 As builder has utilized the TDS amount, he is liable to pay back the amount. Ask your CA to get it back from the builder.

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Mohit Landge

Mohit Landge (Querist)
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27 October 2024 Thank you for your guidance. I spoke with the builder, and the builder’s CA mentioned that we cannot claim the TDS paid on the cancelled property, as the new buyer will also pay TDS for the same flat, which could potentially raise queries with the authorities. Nevertheless, I will request that they proceed with the TDS claim and provide a full refund for the TDS paid on the cancelled property. Thank you once again.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 October 2024 Wish you good luck...

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