TDS payment on resell property

TDS is nothing but a part tax payment on behalf of the person earning the income.  While the registration is done by builder, the sale is actually happening between you and 1st owner.  The TDS should be deposited from the payments to 1st owner and credit should be given to 1st owner.  IN short, TDS should be done for the person whom payment is made. 

Hi,

You should pay TDS for 1st owner.

Hi Suneel,

Hope you are doing well !!

The property sale is actually happening between you and 1st owner.

So, TDS deduction is for 1st owner not for builder. Builder is just served as an intermediatey between you and 1st owner.

Thanks & Regards,

Payal Chhajed

You will need to pay TDS for 1st owner.

Since the property sold to 1st owner was not registered the property will be registered between you and builder and so TDS will be deducted of the builder. So if builder took 1 crore from 1st buyer then you can ask builder to give you 1 lakh and then you can pay tds out of this or else take refund from 1st buyer and then builder would pay 1 lakh to 1st buyer since 1st year wouldn't have deducted TDS and so builder would have taken full 1 crore from buyer.

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Thank you

Hi,

- You need to deposit TDS on behalf of first buyer and not builder as you purchased the property from the first buyer and entire payment was made to the him only.

Thanks

Hi,

- You can obtain copy of ITR and Form 26A from the seller.

Thanks

Hi,

Since the buyer is now refusing to return the money, ask him for his ITR and Form 26 A.

Regards,

Nikhil.

Hi,

Hope you are doing well !!

Obviously, you take receipts from builder after making payments. (even if you do not have receipts and have paid in any mode other than cash, it will be seen in bank account. No problem there.

Show them to builder and say confidently "I have already paid amount for TDS to you. Here are the proofs. So now it is your responsibility to pay it. Either you pay OR refund amount to me and I will pay." 

Otherwise, You have two options:

(1) You can deposit the TDS from your pocket and claim refund from the seller showing Form 26QB; or

(2) You may treat the amount as net of tax(99%) and deposit the TDS to the government and add the same to your cost of purchase( so you are required to amend the deed to include it).

Thanks & Regards,

Payal Chhajed

Seems you have paid entire 100% to the seller. In such a case if you have valid proofs for your payment make the builder aware of the legal requirement of income tax act and ask him to give the 1% back so that you will deposit the same with the Government and the credit of the same will be available to him at the year end.

Why don't to ask the builder to refund you 1% amount which the first buyer would have paid him as he is the one with whom you are going to enter into agreement.

I don't think tax authorities can do anything it's between you two parties and it's your problem that you have paid more and he is not returning you money.

Tax authorities would just ask interest and penalty from you.

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Thank you

Hi

TDS to be paid for 1st owner

Tax authorities cannot help in these.

Only thing can be done is to make seller aware about TDS requirement and based on payment receipts convince him to refund the TDS amount.

Hope it helps

Hi

You need to deduct TDS of the seller since he was the owner of the property then and not the builder. It is a capital ain income for the seller, so his TDS is to be deducted. Further, TDS under section 194IA is at the time of payment. So, pay the TDS amount along with interest.