Regarding TDS on house property

Dear Sir/Madam,

I had purchased a flat in Navi Mumbai last year. Myself & my wife are the joint owners of the property worth 55 Lakh rupees. On the same day of payment to the builder, TDS of 1% has been paid completely by my name.

The details are as follows:- 
Purchased Property price - Rs 55 Lakh 
Owners: Myself & my spouse (Husband/wife) 
Total TDS paid - 55,000 (1%) paid under my name 
Date of payment - 23 march 2015

The entire TDS of Rs.55,000 has been paid on my name in last year March 23, 2015 which is before due date. But now department has sent a notice to my spouse saying that she has not paid TDS & not filled Form 26QS. 

The IT call centre help desk says that both the owners can only pay a share of 0.5% only. Hence 0.5% has to be paid on my spouse name and a penalty of Rs.200/- per day has to be paid from the day of registration (March 23, 2015 to till date) even though that amount has already been paid by me. They are not considering the entire payment I had already made on March 23, 2015. Instead they are saying that correction has to be made in my share in Form 26QB to 0.5% and remaining 0.5% has to be claimed by me for refund. Also the 0.5% share has to be paid on my spouse's name along with penalty of Rs.200/- per day which comes to a huge amount. And they say that after April 23, 2015, extra penalty of Rs10,000 to 50,000/- may be levied by the IT commissioner in case of more delay.

Hence I request you to please provide us a solution in settling this matter without paying the penalty. The point I stress is that if I have made the complete payment before due date & the amount is lying with the Govt., why should we pay the penalty. Instead there should be some way of adjusting the share without paying the penalty. The Govt. should ensure that their portal does not accept the full payment (1%) under a single owner in case of joint ownership and intimate the payer of all the details during payment time. How can they now levy penalty if problem is lying in their side too?

Regards,

Vamshi Krishna
Asked 8 months ago in Income Tax from Mumbai, Maharashtra
I would suggest you to hire a local CA who can represent you because we can just give advice which will not help here. Its a litigation matter.

Please find my opinion below:

In case of a joint purchase of the immovable property, each co – owner is liable to withhold tax in their proportionate share.  However, in case appropriate tax is withheld by one of the co – owners, it shall be taken as sufficient compliance by all co – owners. For example, A and B buy a property from C for Rs 60 lakhs. A and B are jointly liable to withhold 1% of sale consideration from the payments made to C.

Hence, you should not be harassed. 
Abhishek Dugar
CA, Mumbai
766 Answers
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Dear Sir,

In the given case ideally TDS need to be deducted by both the parties and paid to the government.

But since you have make the entire payment and you have paid total TDS there can not be any question of default.

You simply need to present the case and fight out on merit that the purpose of TDS deduction is advance collection of Tax which is already there and government has received tax and as per section also the important thing on TDS deduction is person making payment for property and not person actually owner of the property so you have complied with the law.

In case you face any further quarry and need some help in drafting or others kindly let me know.
Vishrut Rajesh Shah
CA, Ahmedabad
194 Answers
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There is no problem if one pays the entire TDS. You approach your concerned official and can be sorted. 
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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Dear Sir,

Such notices are issued in bulk by the Income Tax Department in the First week of April. A lot of Tax payers have received such notices. In your case you have deducted the taxes and very well paid it to the Government Authorities. The only thing which went wrong is that instead of making the TDS Certificate in joint names you have made it under a Single Name.

There is no such thing to worry about, but the only problem is the lower level Income Tax Officers are always of the Revenue point of view so they may not try and understand your case. Litigation will be involved and you may have to fight it out.

Trust this clarifies your query. 

Feel free to get back/ call back for any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
719 Answers
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Dear Sir, 

It is clear that you have made a default (by whatever reason).
However, Income Tax Authority may certainly waive off your Demand/penalty.

Kindly contact your concerned Income Tax Officer.
In case, you don't get relief, then you can go further to CIT(Appeal) and then to ITAT for relief.

Thanks

For any other query/ Clarification, feel free to contact:
ca.skagarwal@gmail.com
Shiv Kumar Agarwal
CA, Delhi
197 Answers
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