Tds while purchasing apartment from builder
This query is : Resolved
10 September 2013
I am purchasing an under construction flat (1500 SQ Feet) at Bangalore and its value is 51 lakhs (including car parking, amenities, electricity, water etc). This price excludes VAT, Service tax and Registration. Including all total cost come to Rs 60 lakhs. As per Karnataka Govt valuation, registration value comes to Rs 46.5 lakhs approx. If this is the case, do I need to deduct 1 % TDS from the builder? If yes, on which value (60 lakhs or 51 lakhs)?
I am going for 47 lakhs loan with bank. When I enquire with Bank (LIC housing finance and HDFC), they said only If the loan amount is 50 lakhs and above, buyer need to deduct 1 % TDS. Kindly clarify.
I am going for 47 lakhs loan with bank. When I enquire with Bank (LIC housing finance and HDFC), they said only If the loan amount is 50 lakhs and above, buyer need to deduct 1 % TDS. Kindly clarify.
11 September 2013
TDS Applicable only on Paid/Payable Amount is exceeds or equal to 50 Lakh. Dont take in mind that the valuation as per govt or other else. If you payable 50 lakh or more then you must to deduct 1% TDS from payable amount.
11 September 2013
I am not still clear with you answer. What do you mean by paid or payable amount ? Total cost of property including VAT,service tax and Registartion is Rs 60 lakhs and my contribution is 13 lakhs. Remaining 47 lakhs I will be availing housing loan. If this is the case, do I still need to deduct 1 % TDS ?
02 August 2025
Got it, this is a common confusion. Here’s a clear explanation regarding **TDS under Section 194-IA** on property purchase from a builder:
---
### 1. **When is TDS Deduction Applicable?**
* Section **194-IA** mandates **1% TDS** deduction on **purchase of immovable property** (other than agricultural land) if the **total consideration paid/payable is Rs. 50 lakh or more**.
* The threshold is based on the **consideration paid or payable to the seller (builder)**, **excluding registration charges**.
* The total consideration includes the **basic price + car parking + amenities + electricity/water charges** if these are part of the builder’s invoice.
* **VAT, Service tax, and Registration charges are excluded** for TDS calculation.
---
### 2. **Paid or Payable Amount**
* "Paid or payable" means the **actual amount you are liable to pay to the builder** for the property.
* If you are paying Rs 51 lakhs to the builder (excluding VAT, Service Tax, Registration), then your amount exceeds Rs 50 lakhs and you **must deduct 1% TDS**.
* If your total payment to builder is less than Rs 50 lakhs (e.g., Rs 47 lakhs), **no TDS deduction is required**, even if your total cost including taxes and registration crosses Rs 50 lakh.
---
### 3. **Loan Amount and TDS**
* The bank loan amount **does not impact TDS applicability**.
* Whether you pay Rs 13 lakhs from your pocket and Rs 47 lakhs from loan, the **total amount paid/payable to builder** is relevant for TDS.
* If total paid/payable to builder ≥ Rs 50 lakhs, then 1% TDS is mandatory.
---
### 4. **On Which Amount Should TDS be Deducted?**
* TDS should be deducted on the **total consideration paid/payable to builder**, excluding registration and taxes.
* So if the builder’s invoice value (including car parking and amenities) is Rs 51 lakhs, deduct TDS @1% on Rs 51 lakhs.
---
### 5. **Summary:**
| Scenario | TDS Applicability | Amount on which TDS @1% to be deducted |
| --------------------------------------- | ------------------------- | ----------------------------------------------------------- |
| Amount payable to builder < Rs 50 lakhs | No TDS deduction required | N/A |
| Amount payable to builder ≥ Rs 50 lakhs | 1% TDS mandatory | Total amount payable to builder (excl. registration, taxes) |
---
### **In your case:**
* If the **builder’s invoice (property price + car parking + amenities) = Rs 51 lakhs**, you **need to deduct 1% TDS on Rs 51 lakhs**.
* Loan amount doesn’t affect TDS. It’s about how much you pay the builder.
* Registration fees and taxes like VAT/Service tax **are excluded** from TDS calculation.
---
### Additional Tips:
* The TDS must be deducted **at the time of payment** to the builder.
* The deducted TDS must be deposited with the government using **Form 26QB**.
* The builder will get a TDS certificate which can be used to claim tax credit.
---
If you want, I can help you with the exact steps for TDS payment and filing Form 26QB. Would you like that?
---
### 1. **When is TDS Deduction Applicable?**
* Section **194-IA** mandates **1% TDS** deduction on **purchase of immovable property** (other than agricultural land) if the **total consideration paid/payable is Rs. 50 lakh or more**.
* The threshold is based on the **consideration paid or payable to the seller (builder)**, **excluding registration charges**.
* The total consideration includes the **basic price + car parking + amenities + electricity/water charges** if these are part of the builder’s invoice.
* **VAT, Service tax, and Registration charges are excluded** for TDS calculation.
---
### 2. **Paid or Payable Amount**
* "Paid or payable" means the **actual amount you are liable to pay to the builder** for the property.
* If you are paying Rs 51 lakhs to the builder (excluding VAT, Service Tax, Registration), then your amount exceeds Rs 50 lakhs and you **must deduct 1% TDS**.
* If your total payment to builder is less than Rs 50 lakhs (e.g., Rs 47 lakhs), **no TDS deduction is required**, even if your total cost including taxes and registration crosses Rs 50 lakh.
---
### 3. **Loan Amount and TDS**
* The bank loan amount **does not impact TDS applicability**.
* Whether you pay Rs 13 lakhs from your pocket and Rs 47 lakhs from loan, the **total amount paid/payable to builder** is relevant for TDS.
* If total paid/payable to builder ≥ Rs 50 lakhs, then 1% TDS is mandatory.
---
### 4. **On Which Amount Should TDS be Deducted?**
* TDS should be deducted on the **total consideration paid/payable to builder**, excluding registration and taxes.
* So if the builder’s invoice value (including car parking and amenities) is Rs 51 lakhs, deduct TDS @1% on Rs 51 lakhs.
---
### 5. **Summary:**
| Scenario | TDS Applicability | Amount on which TDS @1% to be deducted |
| --------------------------------------- | ------------------------- | ----------------------------------------------------------- |
| Amount payable to builder < Rs 50 lakhs | No TDS deduction required | N/A |
| Amount payable to builder ≥ Rs 50 lakhs | 1% TDS mandatory | Total amount payable to builder (excl. registration, taxes) |
---
### **In your case:**
* If the **builder’s invoice (property price + car parking + amenities) = Rs 51 lakhs**, you **need to deduct 1% TDS on Rs 51 lakhs**.
* Loan amount doesn’t affect TDS. It’s about how much you pay the builder.
* Registration fees and taxes like VAT/Service tax **are excluded** from TDS calculation.
---
### Additional Tips:
* The TDS must be deducted **at the time of payment** to the builder.
* The deducted TDS must be deposited with the government using **Form 26QB**.
* The builder will get a TDS certificate which can be used to claim tax credit.
---
If you want, I can help you with the exact steps for TDS payment and filing Form 26QB. Would you like that?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Salary u/s 194C
- Nill TDS Return FY 2025-26
- Upload Level Validation Error
- Merger issue
- How to add NRE account to income tax profile?
- Deduction for HUF
- AY2025-26- Bug in ITR2 Online Filing - TDS Section related to Property Sale
- Form 10E requirement for Leave encashment and Gratuity received at retirement
- Filing ITR U
- Sale of foreign shares by Indian resident
- GST ITC in ECL and GST PURCHASES DATA IN AIS
- GST rate on monthly hiring of commercial vehicle given for transportation.
- TAXABILITY OF STATE INSURANCE MATURITY RECEIPTS BY RAJASTHAN GOVERNMENT EMPLOYEE ON RETIREMENT ?
- Document to add trade name
- GST Partners addition
- Non-disclosure of Foreign Shares & Dividend in Past ITRs – How to Rectify & Report Now?
- EXEMPTION UNDER SECTION 54 FOR UNDER CONSTRUCTION FLAT
- ICWAI-Final best coaching center for online by English
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Refund_ Insufficient in credit ledger
Trending Online Classes
-
Input Tax Credit, GST refunds and Recovery of refunds- Roadblocks and way outs
CA Nipun Arora03 September 2025 -
GST LIVE Certification Course - 43rd Weekdays Batch(With Govt Certificate)
Industry Expert15 September 2025
CAclubindia
