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Applicability of TDS under 26QB where a partner contributes land as capital under MOU

30 March 2020

we have a partnership firm in which one of the existing partner is contributing land as capital to the firm through memorandum of understanding
the land value exceeds 50 lakhs
is it neccassary to deposit TDS under 26QB
Thanks in advance

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1 Replies

Miss Mansi Bhojani (Practicing Chartered Accountant) (1736 Points)
Replied 31 March 2020

As per section 45(3),if a partner contributes an immovable property or capital asset in form of capital contribution the same is treated as transfer and capital gains provision apply. Therefore, it is considered sale and if the value exceeds Rs 50 Lakhs then TDS provisions do apply to deduct TDS @ 1%.