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Tds on sale of property

balbir singh (FCA) (33 Points)

25 August 2013

TDS to be deducted on all payments made to developer except service tax in case of sale of property by developer in under construction projects i.e. tds on service tax amount not applicable.

it is my interpretation. i want to confirm.

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8 Replies

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 25 August 2013

Is dat a query or ur interpretation or a clarification from CBDT??

Mihir (Wealth Manager) (5293 Points)
Replied 25 August 2013

There are not one but two TDS sections

194I - on rent (where TDS deducted not on service tax portion of rent of property)

194IA - on sale of property (on the basis of sale agreement)

manoj (student) (5205 Points)
Replied 25 August 2013

also addition if it is in Maharashtra add VAT

CA vinod (Chartered Accountant) (518 Points)
Replied 26 August 2013

As the wordings of the Sec 194IA is "Any sum" ...It includes service tax also

Joshy (Sr. Accounts Manager) (27 Points)
Replied 27 August 2013

My understanding is that buyer has to deduct TDS from amount paying June/13 on wards, if the property value (Sale consideration) is more than 50 Lakh. But when one of my client faced problem with registrar office when he went for registering his above 1 cr property and is deducted tds only from payment made to the builder from Jun/13 on wards where the registrar is insisting to show the TDS payment challan on whole property value. In this case, I want to understand more. Can anybody help me out?

CA vinod (Chartered Accountant) (518 Points)
Replied 28 August 2013

Yes ur view is correct, On a reading of the section, it appears as if the trigger for section 194-IA is payment or credit of any sum for transfer of immovable property. Tax withholding should be restricted only to any payments made after June 1, 2013. Suppose for a property of 70 lacs if the purchaser pays 40 lacs before June,13 and remainig 30 lacs pays after June'13, Tax should be deducted only on 30 Lacs. (i.e Payments made after June'13)

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