Urgent regarding Property Acq.

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808 Points Posted on 21 November 2020
if lawyer provides services regarding ownership change in case of building and charges Rs.50000, then whether TDS is applicable because we capitalise that expense, because total expenses incurres are Rs. 6lac including stamp duty
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On 21 November 2020 at 07:11 Report
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This discussion clarifies whether Tax Deducted at Source (TDS) applies to legal fees paid for property acquisition, especially when these costs are capitalised. Experts confirm TDS is applicable under Section 194J on legal services exceeding Rs. 30,000, even if the expense is capitalised. The thread also touches upon the debate regarding the capitalisation of lawyer fees for ownership changes and the implications of not deducting TDS.

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Accountant
3662 Points Posted on 21 November 2020
Yes

TDS is applicable u/s 194J on Rs. 50000
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On 21 November 2020 at 08:54
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808 Points Posted on 21 November 2020
Even if we capitalise whole exp.?
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On 21 November 2020 at 09:20
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Accountant
3662 Points Posted on 21 November 2020
Yes, Anmol Ji
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On 21 November 2020 at 09:32
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Student
23693 Points Posted on 21 November 2020
Yes TDS U/s 194J of the Income Tax Act 1961 @ 10% will be applicable on Legal Services since the amount exceeds Rs. 30,000.
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On 21 November 2020 at 10:45
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In Practice
1951 Points Posted on 22 November 2020

If TDS is not deducted on Rs 50,000 of Legal fees what will be the consequenses ? Whether Depreciation on Capitalised Legal fees will be allowed?

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On 22 November 2020 at 23:31
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808 Points Posted on 23 November 2020
Sir, I am in favour of point that we can capitalise even lawyer fees also as it is incurred for ownership change. but some experts are saying that you cannot capitalise lawyer fees. It leads to contradictory treatment. what can I do?
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On 23 November 2020 at 07:28

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