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TDS on Sundry payments to seller of a new property

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RS Chhokra

21 Points Posted on 23 April 2023

I have booked a flat in a building under construction. I have paid all the instalments of the consideration value along with GST and TDS. At the time possession, I am required to make some additional payments like Infrastructure development, society formation, Electricity Connection and Gas connection etc. And I am also required to pay TDS on these payments. I would like to know under what account heads these TDS payments should be made.

Thanks

Replies (3)

Quick Summary

When purchasing a new property, you may need to make additional payments beyond the main consideration, such as for infrastructure, society formation, or utility connections. These sundry payments, if they are ancillary to the sale of the immovable property, are generally subject to TDS under Section 194-IA of the Income Tax Act, 1961. This includes fees for club membership, parking, power, water, maintenance, and advance payments related to the property.

sabyasachi mukherjee

Profession

19978 Points Posted on 23 April 2023

Full consideration value alongwith GST AND TDS. YES YOU ARE ALSO REQUIRED TO PAY TDS ON THESE SUBJECT TO SOME CEILING.

CA Sorav Gupta

Chartered Accountant

328 Points Posted on 24 April 2023

As per section 194 IA of the Income Tax Act, 1961, any fees for club membership, parking, power or water facilities, maintenance, advance payments, or other similar fees that are ancillary to the sale of the real estate are included in the consideration for the transfer of any immovable property.

Hence, TDS shall be deducted on all these amounts u/s 194 IA.

In case of any further queries, kindly mail me at casoravgupta @ gmail.com

Thanks & Regards

CA. Sorav Gupta

(Practicing Chartered Accountant)