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TDS on Payment for Under Construction property

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Harshvardhan vaidya

33 Points Posted on 07 August 2023

Hi this is a case from Bengaluru -

Note - In Karnataka registration of property happens post last disbursement and completion of property.

I have booked a under construction property - it will take 3 years to complete. I am going to start disbursement to builder this month, question is on TDS deduction. As a part of first disbursement I have to pay 10L . My builder is asking to pay complete 10L now and so on till last disbursement - then just before the registration he would assist me paying the TDS - For ex : Last disbursement ask is 10L and property value is 1Cr then 1% = 1L would be reduced from asked disbursement and I will pay 9L to builder and 1L as TDS.

Question - Is it ok to pay TDS at the end as against paying it per installment. Is there any such rule which allows paying at the end?

Replies (4)

Quick Summary

This discussion addresses the deduction of Tax Deducted at Source (TDS) on payments for under-construction properties in Bengaluru. The user is questioning the practice of some builders who suggest paying TDS only at the final disbursement, rather than on each instalment. While some builders in Bengaluru advocate for this approach, tax regulations generally require TDS to be deducted on every payment made towards the property.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121537 Points Posted on 07 August 2023

Rule is to deduct TDS on each and every installment paid.

Harshvardhan vaidya

33 Points Posted on 07 August 2023

Thanks - makes sense.

Not sure why some of the prominent builders in Bengaluru are asking to deduct it in last payment (I know Sumadhura Infracon and Assetz Builder as pushing for TDS deduction in the last payment)