Tds u/s 194 ia
This query is : Resolved
16 February 2016
In one of our case a client received advance money of Rs 3 Cr in the month of Feb 2015 for sale of immovable property, TDS on above sum is duly deducted & deposited by the buyer but the sale deed are not executed in the F.Y 2014-15, so now my query is that can we claim credit of TDS in A.y 15-16 or it will be allowed in A.y 16-17.
17 February 2016
Your client can claim in FY2014-15. If he handed over the property in FY2014-15 i.e. before registration itself, take the recourse of Sec. 53A of TPA and sec. 2(47)(vi) of the Income Tax Act and offer the capital gains tax in the FY2014-15.
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18 February 2016
Sir, its 2 (47)(v) but its not apply in our case because possession of property is not handed over to buyer, its simply a case of advance money received for transfer to be made in future.
28 July 2025
Got it! Here’s a concise clarification on your query about **TDS u/s 194-IA on advance received for immovable property** where sale deed is not executed in the same FY:
---
### Issue:
* Buyer paid **advance Rs 3 Cr** in Feb 2015 (FY 2014-15).
* TDS was deducted and deposited by buyer.
* **Sale deed not executed in FY 2014-15**, only likely in FY 2015-16.
* When can the seller claim the TDS credit? AY 2015-16 or AY 2016-17?
---
### Explanation:
* **Section 194-IA** requires TDS deduction at the time of payment or credit of consideration for immovable property.
* The TDS is deductible at the time **when payment/credit is made** irrespective of registration/sale deed.
* The **seller can claim the TDS credit in the AY corresponding to the FY in which advance was received**, i.e., **AY 2015-16**.
* This is because **TDS credit is linked to the receipt of income (advance in this case)**, not to the execution of sale deed.
* Sale deed execution affects capital gains tax liability timing, but **not TDS credit timing**.
* Even if possession or transfer is not complete, the receipt of advance triggers the tax event for claiming credit.
---
### Relevant Points:
* If possession is handed over before registration (rare), provisions of Section 53A (Transfer of Property Act) and Section 2(47)(v)/(vi) of Income Tax Act may apply.
* Since possession is **not handed over here**, above provisions don’t apply.
* So, the TDS credit can be claimed in **AY 2015-16** (FY 2014-15).
---
If you want, I can help draft a letter or formal note for your client or tax advisor confirming this position. Would you like that?
---
### Issue:
* Buyer paid **advance Rs 3 Cr** in Feb 2015 (FY 2014-15).
* TDS was deducted and deposited by buyer.
* **Sale deed not executed in FY 2014-15**, only likely in FY 2015-16.
* When can the seller claim the TDS credit? AY 2015-16 or AY 2016-17?
---
### Explanation:
* **Section 194-IA** requires TDS deduction at the time of payment or credit of consideration for immovable property.
* The TDS is deductible at the time **when payment/credit is made** irrespective of registration/sale deed.
* The **seller can claim the TDS credit in the AY corresponding to the FY in which advance was received**, i.e., **AY 2015-16**.
* This is because **TDS credit is linked to the receipt of income (advance in this case)**, not to the execution of sale deed.
* Sale deed execution affects capital gains tax liability timing, but **not TDS credit timing**.
* Even if possession or transfer is not complete, the receipt of advance triggers the tax event for claiming credit.
---
### Relevant Points:
* If possession is handed over before registration (rare), provisions of Section 53A (Transfer of Property Act) and Section 2(47)(v)/(vi) of Income Tax Act may apply.
* Since possession is **not handed over here**, above provisions don’t apply.
* So, the TDS credit can be claimed in **AY 2015-16** (FY 2014-15).
---
If you want, I can help draft a letter or formal note for your client or tax advisor confirming this position. Would you like that?
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