TDS on sale of property when dual ownership

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deodatta marathe

25 Points Posted on 13 August 2021

Hello,

In below scenario please let me know if TDS is applicable or not.

1. Seller are having Joint ownership.

2. Buyer is also having will have joint agreement in registry.

Total Sales deed value is 70,00,000

Does buyer needs to deduct 1% tds ? Because total amount is more than 50,00,000? Or since its joint ownership, amount is equally divided and hence amount paid to individual is less then 50,00,000. tds will be exumpted?

Also, in case buyer didn't pay tds, what precaution he should take to justify the decision.

And if buyer paid tds, is there a way seller can return file the tds amount since he never got amount more than 50,00,000 ???

Replies (5)

Quick Summary

This discussion explores whether Tax Deducted at Source (TDS) applies when a jointly owned property is sold. The core question is whether TDS is applicable if the total sale value exceeds Rs 50 lakh, or if it's exempt because the amount received by each joint owner falls below this threshold. The consensus suggests that TDS under Section 194-IA is only applicable if each individual seller's share of the sale consideration exceeds Rs 50 lakh. If the property is jointly inherited, it's generally assumed the sale proceeds are divided equally unless a specific contract states otherwise, potentially exempting the transaction from TDS.

Sudhir Kulshreshtha

Advocate

127 Points Posted on 13 August 2021

Tax deducted at source (TDS) of 1% is applicable on the sale of immovable property, as per Section 194-IA (2) as deducted tax. However, TDS on sale of property in case of joint owners would be applicable only if the sale consideration of each of the joint owners exceeds Rs 50 lakh.
Here please note that if there is no contract between the joint owner of the property this will be divided equally as par section 46 of Transfer of property act.
Therefore no TDS should be deducted.

deodatta marathe

25 Points Posted on 13 August 2021

Thank u.. any specific document buyer should take from seller? Ex. Declaration about divided amount paid?

Sudhir Kulshreshtha

Advocate

127 Points Posted on 13 August 2021

No document is required just quote the section if required anywhere section 194-1A(2) read with section 46 of transfer of property act.

deodatta marathe

25 Points Posted on 14 August 2021

Thanks a lot for all your help.

Kalyani Srinivas

53 Points Posted on 04 September 2023

My case is also similar one,if any expert here knows...please answer

My mother and father both have separate business incomes and they are filing IT returns every year.They both want to buy a property jointly.Total sale value is 56 lakhs.They both want to transfer money to sellers in 50:50 ratio.Even sellers inherited that property jointly.We assume that the share of the individual is less than 50lakhs,so we won't liable to cut TDS.But some people saying that,even you are buying jointly;you are registering this property in a single sale deed and not registering separately.So you have to cut 1% TDS in sale value.Is this version correct or not?Plz reply.