TDS rule section 194-IA in case of joint owner

TDS 2553 views 4 replies

Vinod Kumar

ABC

124 Points Joined December 2011

I need clarification about TDS rule section 194-IA . If someone buying a joint property( 2 owners - 50 % share each) say for Rs. 52 lacs , then does it attract TDS ? In this case , property is jointly owned and each owner's share is Rs. 26 lacs( less than threshold limit of 50 lacs). As per following order , it seems it does not attract TDS but I am not sure if such verdicts are applicable for everyone or just one person who filed this appeal. https://www.taxwink.com/blog/vinod-soni-vs-ito-tds-itat-delhi .

some details are as below about the order:
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Case Descripttion: Vinod Soni Vs. ITO (TDS)

Court: ITAT Delhi

Appeal No. : ITA No. 2736/Del/2015

Date of Order: 10th December, 2018

In favour of: Assessee

Order pronounced by the court: - Section 194-IA will not be attracted in case of joint buyers of an immovable property where the share of each joint buyer is less than Rs. 50 Lakhs. For the purpose of applicability of TDS u/s 194-IA, each buyer is to be treated as a separate entity and therefore, the law is to be applied individually to each buyer.

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Any clarification in this regard will be much appreciated.

Regards

Replies (4)

Sumegh Kelkar

38 Points Joined August 2019

As per sec 194 IA (2) the consideration threshold of 50lacs is for the immovable property as such and not for the part property. In the given case though the consideration is apportioned between the joint owners, from the buyers point of view it is for the property as a whole and exceeds 50 lacs. Hence as per my view TDS should be done.

JGM

Knowledge Sharer

443 Points Joined September 2021

Section 194-IA is qua the buyer and qua the immovable property. In the instant case, as the payment is to be made to joint owners, in my view, the applicability of threshold of INR 50 lakhs should be per joint owners. Hence, there should not be any TDS requirement.

JGM

Knowledge Sharer

443 Points Joined September 2021

With respect to Case law cited, since it is ITAT decision, it will be binding on the tax department falling in that jurisdiction (i.e. Mumbai). however, practically, Tax Department will not accept it and may proceed with the addition. You should get relief at higher forum (say CIT(A) or ITAT) unless this decision is reversed by SB / HC / SC subsequently.

Kalyani Srinivas

33 Points Joined July 2023

My case is also similar to the above vinod soni vs ITI case.

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.