Tds not deducted for purchase of immovable property.

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Varun

Other

34 Points Posted on 09 May 2016

I booked a flat in underconstruction property in May 2013, i paid initial 20% amount to builder.

After that whenever i used to get demand letter from builder, i forwarded the same to my bank from where i took loan. The bank used to issue the check for the same amount. I didn't instructed bank to deduct 1%TDS as i was not aware.

Now i received possession of the flat in April 2015.

THe questions i have is :

1. How the sale value of flat is decided? Does it include registration etc, or the amount only paid to builder, including maintainence, parking space etc. Or its just per.sq.feet rate * super built up area.

2. Now i have not deducted the tax, and builder is not going to reimburse me the amount. What should i do?

3. I have read somewhere that if builder has already paid the same from his side, i can get waiver for penalty fees that is Rs 200/- per day. I only have to pay the interest due.

Please help me with the same.

Replies (4)

Jayashree

Software Engineer

113 Points Posted on 09 May 2016

Same case as of mine. But in my case I deducted TDS and filed return after 80 days starting from the date of registration.

Even for 80 days delay I have to pay 36K as penalty. Looking at most of the blogs and forums, it looks like there is no escape for that Rs 200 / day late filing penalty.

Experts please adivce here there are many people like Varun and myself who never thoght of seriousness of " TDS duducion at the time of registration"

Builder won't bother as it is not his affair. But that is hitting very bad to normal people.

Varun

Other

34 Points Posted on 09 May 2016

Hi Jai,

Did you received any notice from IT dept.

As far as i know the penalty can't be more than the tax amount itself. Experts please advice...

Jayashree

Software Engineer

113 Points Posted on 10 May 2016

Yes. I got the demand notice u/s 200A. What about you?

D J M

Chartered Accountant

32 Points Posted on 11 May 2016

The provisions of Income Tax Act, requires the buyer to deduct tax at source @ 1 % on the value on which the property is being purchased.

In the case of flat construction, initially the buyer's undivided share in land is being registered by the builder and then an agreement for costruction is being entered into between the buyer and builder. Insuch case TDS is attracted only if the pruchase price of the undivided share is in excess of Rs. 50, lakhs.