Clarity on 26qb in joint owner purchase

TDS 5032 views 6 replies

I am about to purchase a property and wanted some clarity. Property is being purchased along with my mother. All funding is coming from my Mother's account in leiu of another property that got sold in her name as we would want to save on tax on capital gain. Complete property amount, stamp duty is paid by her. On sale deed my mother and I would be buyers. My name is there more as a joint owner but I will not be paying anything from my account. Payment is being done in lumsum with no home loans from either side . Seller is single individual. My queries :

1) For 1% TDS, should my mother be paying complete amount via form 26qb since she is funding entire purchase? 

2) Do I need to file form 26QB? What I understood from discussion is that TDS is payed based on proportionate ownership. Since I have not contributed anything, I don't have to file 25QB. Is that correct? 

3) while filling form 26QB, with my mother's PAN, do I have to mention more than 1 buyer?

 

My lawyer and CA said that since my mother is funding the entire amount, she should only file 26qb for entire 1% amount and I need not file it. My name can however be in Sale deed even if I have not contributed anything. Even in 26qb form, I can mention as only single buyer as she is paying entire 1% and funding the entire purchase. Is this correct approach?

Replies (6)

"Do I need to file form 26QB? What I understood from discussion is that TDS is payed based on proportionate ownership. Since I have not contributed anything, I don't have to file 25QB. Is that correct? "

Not correct.

All the purchasers listed in the agreement/deed are liable to comply their responsibility.

Has your agreement specified youself as joint holder with ZERO PERCENT OWNERSHIP?

Thanks for the response. 

The sale deed just lists my mother as the 1st owner and me as the 2nd owner. Since entire fund is coming from my mother's account, I'm being told that it is fine for my mother to pay 1% TDS (using her PAN) and I dont need to file anything. when I went through multiple forums, it just lists that if X has paid A% and Y has paid B%, X should pay (A% of 1%) and Y should pay (B% of 1%). 

Its based on ownership as mentioned in the deed. & when the shares in property Is not clarified, its taken as 50:50.

Secondly, even though your mother's contribution is cent percent, but when both of you share 1% TDS, department will not send any query, which is likely otherwise. 

The reason I was told not to pay 0.5% TDS from my PAN is that it would be difficult to justify later as there was no payment done from my side.  Since it's within the family and blood relation this is fine as long as I ensure 1% TDS is paid as its more on behalf of seller rather than buyer.  What you mentioned is what I was planning based on forums but when I was told otherwise from my lawyer and CA it confused me 

Even the correct interpretation of the act which reads: "Tax shall be deducted at the time of payment or at the time of giving credit to the transferor, whichever is earlier."; So, when you do not pay any single penny, your liability to deduct TDS does not arise.

But the clarification given by Department is as : Online statement cum challan Form/ Form 26QB is to be filled in by each buyer for unique buyer-seller combination for respective share. E.g. in case of one buyer and two sellers, two forms have to be filled in and for two buyers and two seller, four forms have to be filled in for respective property shares.

So, the question which I asked earlier is:: have you clarified your share in the agreement? If no, department/ officer may take it as 50:50, and that much loan part from your mother to you in the property, and make you defaulter.

Practically in such situation, what the experienced professionals do is, pay around Rs. 50000/- (or about 5% of transaction value) from joint holder, & deduct about TDS of Rs. 500/- from his side (here son) and rest from the main joint purchaser (here from mother's side).

Thanks for the reply. I somehow liked the last option of paying a small amount from my account and paying TDS accordingly. 

 


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