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TDS on Purchase of a property

Gunalan Natarajan (1 Points)

15 October 2019

Kindly enlighten me if TDS is required to be deducted by the purchaser of a flat in an apartment complex u/s 194IA is :

1) Value of land alone (UDS) as in sale deed or

2) Total value of property (ie) UDS Value + cost of construction?

Regards

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3 Replies

Kapadia Pravin (17249 Points)
Replied 15 October 2019

When you are buying land alongwith construction from the seller, and the total consideration exceeds 50 lakhs then you are bound to deduct TDS @ 1% under 194IA

Suresh Thiyagarajan (Student) (3986 Points)
Replied 15 October 2019

1. Yes, accept with Pravin Ji. The wordings given under sec 194IA is consideration paid towards the purchase of immovable property. It also includes land and building costs if the same is paid together for purchase of an immovable property.
2. So if the consideration for payment towards the purchase of an immovable property exceeds Rs. 50 lakhs then TDS @ 1% on the entire consideration shall be deducted u/s 194IA.
3. In addition to the above, consideration also includes 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 the transfer to the immovable property.
Please correct me if the above solution has an alternative view.

CA Arun Tiwari (Partner) (3720 Points)
Replied 22 January 2020

Sec 194IA requires to deduct the TDS @ 1 % if the total consideration for the Land including Construction cost exceeds 50 lakh then this section comes into the picture .