Tds on property sale

TDS 366 views 4 replies

Srinivasan Krishnan

Salaried

62 Points Joined February 2016

Dear Forum Members

I am writing to seek a specific advice on TDS on Property Sale. I am selling my property – Agriculture Land. There are 2 buyers for the properties. The sale details and amounts are below.

Property 1 (Buyer No 1) – Sale Value – Rs 19.82 Lakhs
Property 2 (Buyer No 1) – Sale Value – Rs 24.89 Lakhs
Property 3 (Buyer No 2) – Sale Value – Rs 30.35 Lakhs

I understand that on sale of property exceeding Rs. 50 lakhs in India, a tax of 1% has to be deducted on the total sale consideration before making the payment to the seller. The 3 properties are being registered as 3 separate documents to 2 separate buyers with 1 buyer buying 2 properties and another buyer buying 1 property. The 3 documents or 3 properties are collectively above the threshold limit of Rs 50 Lakhs, but each of the 3 properties even if I factor Buyer 1 alone who is buying Property 1 & 2 the sale value will be less than the Rs 50 Lakh threshold limit

Please advise if this sale will be subject to 1% TDS

Shall appreciate feedback and suggestions from the members of this forum

Regards

P S Krishnan

Chennai

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

210160 Points Joined July 2016

TDS deduction not applicable over (rural) agricultural land...........

1 Provisions of Section 194-IA:

(1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon.

(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees.

(3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

Explanation — For the purposes of this section,—

(a) "agricultural land" means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;

(b) "immovable property" means any land (other than agricultural land) or any building or part of a building.