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TDS on purchase of Immovable Property from NRI - Agreement or payment date?

RANJAN (C.A.) (102 Points)

21 April 2021

Hello,

Assessee purchased property from NRI with below details:

Agreement Date: 31/03/2021

Registration date: 16/04/2021

Advance Payment of Rs.2 Lacs: 01/03/2021

Balance Payment: Yet to be released

Question: TDS u/s 195 to be deducted in which Financial Year & on what amount?

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8 Replies

Zeal Bangdiwala (Partner at N. Gamadia & Co.) (363 Points)
Replied 21 April 2021

As the agreement has been entered into the TDS needs to be deducted on 31.03.2021 on the full value of consideration.

1 Like

RANJAN (C.A.) (102 Points)
Replied 21 April 2021

Thanks for the quick reply. I have one more question, the said transaction will be reported in AIR by IGR in FY 2020-21 or FY 2021-22 since the agreement is registered in FY 2021-22

Zeal Bangdiwala (Partner at N. Gamadia & Co.) (363 Points)
Replied 21 April 2021

I think it will be the registered year that is FY 21-22. Also you have to claim the capital gain or loss in FY 21-22

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 21 April 2021

Agree with Zeal

CA Raj Doshi (Practising CA) (8689 Points)
Replied 22 April 2021

I opine that capital gain will be calculated for the year FY 2020-21. however IGR will report in FY 2021-21.

TDS to be deducted on Rs. 2 lakh on 01.03.2021.

TDS to be deducted on balance amount on 31.03.2021.

You need to pay TDS by 30th April 2021.

RANJAN (C.A.) (102 Points)
Replied 22 April 2021

So basically if the seller has to apply for lower deduction, it has to be for FY 2020-21 or FY 2021-22?

CA Raj Doshi (Practising CA) (8689 Points)
Replied 22 April 2021

It will be for FY 2020-21

Zeal Bangdiwala (Partner at N. Gamadia & Co.) (363 Points)
Replied 22 April 2021

When the Agreement is registered in April 2021 then it will fall in FY 21-22.also in income tax under the AIR transaction it will appear in FY 21-22 so to avoid unnecessary litigation advisable to offer gain in FY 21-22. Further Seller won't be able to apply for Lower TDS for FY 20-21 as the year is already over.