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TDS on Hand over charges

Shailesh (Manager) (37 Points)

18 October 2021

The builder has charged the buyer of the flat, the handover charges of Rs 35000/- separately beyond agreement value (On which TDS @ 1% is already deducted by buyer). What should be the TDS on handover chrages and under what section the individual buyer has to deduct, if any.

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Kev Men (756 Points)
Replied 18 October 2021

As per explanation (aa) to Section 194-IA, "consideration for transfer of any immovable property" shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property."

In the above mentioned case, 'handover charges' can be considered as other charges incidental to transfer of immovable property. Hence it is advisable to deduct 1% on Rs. 35000 as well under section 194-IA.

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Shailesh (Manager) (37 Points)
Replied 19 October 2021

Thanks Kevmen!! In this case, payment will exceed the agreement value by Rs 35000/- in 26QB. Also I hope there is no impact on stamp duty and registration charges.

Kev Men (756 Points)
Replied 19 October 2021

You are right that the payment will exceed agreement value by Rs. 35000 in 26QB. I don't think there will be an impact on stamp duty and registration charges as they are paid on the value assessed by the governmental authority; which might be based on several factors.

This is my humble view.