• 1% TDS on property purchase

Hi,

I am buying a house for Rs. 45 lakhs but the stamp duty value of the same is Rs. 55 lakhs.  
As a buyer/purchased do I still have to deduct and deposit 1% TDS under Section 194IA ?

Thanks
Sabyasachi
Asked 5 months ago in Income Tax from United States
Yes. You have to
Vidya Jain
CA, Kolkata
622 Answers
14 Consultations

4.8 on 5.0

Yes...you will need to.
Nikhil Khanna
CA, Mumbai
1290 Answers
15 Consultations

5.0 on 5.0

Yes you need to deduct TDS @1% on the whole amount of RS.55 lacs and deposit it within 30 days using Form 26QB.

We may assist you in submitting it.

Please share the agreement on .com.
Vivek Kumar Arora
CA, Delhi
1541 Answers
36 Consultations

5.0 on 5.0

As per law, mnimum sale consideration is stamp duty value of the property. Capital gain in the hands of seller will be calculated on the basis of 55 lacs only irrespective of what amount has been transferred in his account. You are also required to deduct TDS on 55 lacs. Law will consider RS. 10 lacs payment in cash which will create problem for both of you.

Please deduct TDS on 55 lacs otherwise it will be short deduction and you end up in paying interest.

Vivek Kumar Arora
CA, Delhi
1541 Answers
36 Consultations

5.0 on 5.0

Hi sabyasachi,
Yes you being transferee, have to deduct 45000 (1% of 45lakhs). Moreover you cannot make cash payment of more than 10000 as per other provision of law. 
Vidya Jain
CA, Kolkata
622 Answers
14 Consultations

4.8 on 5.0

It depends upon what value you put in your purchase agreement.

If agreement value is 45 lacs (which is not suggested as tax department may try to tax differential 10 lacs as a gift), then you are not required to deduct TDS.

However, if agreement value is 55 lacs, then you should deduct TDS because otherwise it will be very difficult to justify that transaction value is 45 lacs.

Please feel free to call/ revert in case you need more clarity

Thanks and regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
3569 Answers
158 Consultations

5.0 on 5.0

To be on safe side, deduct tds @1% on 55 lakhs.
Nikhil Khanna
CA, Mumbai
1290 Answers
15 Consultations

5.0 on 5.0

Yes you need to deduct TDS since sale consideration is stamp duty value. 
Swati Agrawal
CA, Indore
678 Answers
1 Consultation

5.0 on 5.0

HI,

The TDS at the rate of 1% shall not be required to e deducted in case the actual sale/purchase transaction is happening below 50 lacs irrespective of the stamp duty value. Since in youor case it is 45 lacs, no requirement to deduct TDS @1%.

Thanks
Damini
Damini Agarwal
CA, Bengaluru
269 Answers
13 Consultations

5.0 on 5.0

You can deduct these expenses from sale proceeds to arrive at capital.gain. however , it cant be deducted from 10 lakhs which will be shown as other sources income 
Vidya Jain
CA, Kolkata
622 Answers
14 Consultations

4.8 on 5.0

None of these expenses can be adjusted with 10 lakhs that is Income from Other sources.
Nikhil Khanna
CA, Mumbai
1290 Answers
15 Consultations

5.0 on 5.0

You can't deduct anything from the 10 lacs. Entire 10 lacs will be taxable.

Please feel free to call/ revert in case you need more clarity

Thanks and regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
3569 Answers
158 Consultations

5.0 on 5.0

Yes, Rs. 10 lacs will be considered as Income from other sources. All such expenses can be added to the cost of property and can not be deductible from Rs.10 lacs. It is better to register the property at Rs.55 lacs.
Vivek Kumar Arora
CA, Delhi
1541 Answers
36 Consultations

5.0 on 5.0

Hello,

There is no requirement for you to deduct TDS on this property purchase value, but yes, the difference between the purchase value and the agreement value shall be chargeable to tax in your case.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

You have to deduct tds on full amount. Property purchase related expenses can be added to cost of acquisation.
Swati Agrawal
CA, Indore
678 Answers
1 Consultation

5.0 on 5.0

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