Deduction of tds on transfer of immovable property (other th

Statutory Framework : -

• As per Finance Act, 2013, (w.e.f. June’13) TDS (1%) has to be deducted…. by Buyer of the Immovable Property (other than agricultural land) for value exceeding Rs. 50 Lakh.

• As per Income Tax Rules, Agricultural Land coming under Notified Area would not be considered as “Agricultural Land” for the above said purpose.   

Case for Opinion : -

• A (an agriculturist) entered into an Agreement for Sale with B (Non-Agriculturist) for sale of 4654 SqM of Agricultural Land (coming under Notified Area) and received 99% of consideration amount pending execution of Sale Deed.

• Before execution of the Sale Deed with B…. A, with consent of B, sold 1299 SqM of that Agricultural Land to C (an agriculturist) through registered sale deed. Though, B was not a confirming party to the registered sale, major part of consideration is paid to B at the instance of A.    

• TDS @ 1% has been deducted on entire consideration amount i.e. paid to A & B.

Query : -

While we deposit TDS payable on consideration paid to A & B, whether TDS is payable on behalf of

1. A only…as Sale Deed is between A & C

2. A & B respectively for their share … as directed by Seller - A