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Tds on sale of property section 194ia

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Suraj

670 Points Posted on 29 March 2016

Dear All,

Fact:

Mr. A purchased a property for 65 lacs in January 2015. He paid entire amount of Rs. 65 lacs to the builder without deducting any TDS u/s 194-IA in Form 26QB. The builder has shown entire amount of Rs. 65 lacs in his books as full consideration received and accordingly filed his return. He could not taken any credit of TDS @ 1% i.e. Rs. 65,000/-as we have not deducted nor paid.

Now we have received a notice from IT department asking to pay tds on sale of property and to file 26QB form.

Query: As the builder has already accounted the amount paid by us i.e. sales consideration of Rs. 65 lacs and paid the taxes on that. Whether this fact can help us not to file Form 26QB and non-payment of TDS now because if filed now, it will attract penalty till date.

Kindly suggest.

Thanks,

Suraj

Replies (1)

Vishal Goel

Chartered Accountant

1725 Points Posted on 29 April 2016

In your case CPC TDS is not only charging interest u/s 201, but also late fee u/s 234E of the Act.

The interest payable under Section 201 is 1% per month if tax wasn't deducted and 1.5% in case this was done but not paid.
Late filing fee under Section 234E for delaying the interest payment of `200 per day, subject to the maximum of taxes due.

If the seller has already paid capital gains tax or claimed capital gains exemption (on the sale of property). The buyer can submit Form 26A certificate from a chartered accountant and request that penalty under Section 234E should not be levied. Though this will save you from the late filing fee, the interest under Section 201 will still apply.