Yes. You have to
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
Yes. You have to
Yes...you will need to.
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 firstname.lastname@example.org.
It seems bit confusing ... As I am getting different responses from different forums. This is what I got from income tax portal. https://www.incometaxindia.gov.in/Charts%20%20Tables/TDS%20Purchase%20of%20Immovable%20property.htm " (1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon." From the above statement it looks like, 1% of the amount that I am actually crediting to the resident transferor in cash or by issue of a cheque or draft or by any other mode. In my case it's 45 lakhs. Please check and advise. Thanks.
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.
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.
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
To be on safe side, deduct tds @1% on 55 lakhs.
Yes you need to deduct TDS since sale consideration is stamp duty value.
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
I believe I have to pay taxes on this 10 lakhs (Stamp Value - Purchase price) as income from other sources. What all property purchase related expenses, like broker commission, stamp duty/registration fee, lawyer fees, home improvement etc. I can deduct from this 10 lakh taxable income ? Thanks in advance.
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
None of these expenses can be adjusted with 10 lakhs that is Income from Other sources.
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
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.
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
You have to deduct tds on full amount. Property purchase related expenses can be added to cost of acquisation.