TDS on property sale linked with home loan

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Surya

Employee

21 Points Posted on 16 August 2020

I have a query regarding the TDS on my property. I have a home loan linked with the property and the outstanding is 23 Lacs.

I sold my property to a buyer who is transferring the home loan from the same bank. The total sale value of the house is 37 lacs and the stamp duty he is paying is on this amount. However, the sale agreement executed for 67 lacs and was provided to the bank with the condition to repair and renovate for remaining 30 lacs. So, total 37 lacs is the cost of the house and 30 lacs is the renovation charges.

Bank is providing a total of 55 lacs loan to the buyer, in which my outstanding balance of 23 lacs will be deducted and I will get 32 lacs.

Now, is it required to pay TDS as the total as per sale agreement is 67 lacs or not required as per sale deed it is 37 lacs. Or is it not required because the bank is deducting my outstanding loan and the amount I receive falls under 50 lacs. Please help with the response.

Replies (2)

Quick Summary

This discussion concerns the applicability of Tax Deducted at Source (TDS) on a property sale where a home loan is involved. The seller is querying whether TDS is required when the sale agreement value is higher than the sale deed value, and how the buyer's home loan transfer impacts the calculation. The core question is whether TDS is triggered based on the 67 lakh sale agreement or the 37 lakh sale deed, especially since the net amount the seller receives after the buyer's loan transfer is less than 50 lakhs.

CA Raj Doshi

Practising CA

5649 Points Posted on 17 August 2020

TDS Not required as the sale deed in less than 50 lakhs.

Ravi SADhiyan

Practice

3087 Points Posted on 17 August 2020

(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.