• Do all joint owners of flat have to deduct TDS and fill form 26QB separately?

Hello,
I'm purchasing a new flat with my wife and my younger brothers as co-owners. All three of us are earning and all three of us would like to take rebate in income tax for interest & principal payments as per our contribution. However, we have some queries related to TDS, which are mentioned below:
1. Do we all need to deduct TDS separately and fill separate form 26QB?
2. If separate forms are required, then do we need split the consideration value of flat and installment value both as per our contribution ratio in our forms? or only the installment value?
3. The payment contribution ratio is something which we can work out amongst ourselves only or it needs to be documented somewhere also?

It would be really helpful if you could respond to the above queries.
 
Many thanks in advance,
Asked 4 years ago in Income Tax

1) Yes

2) If you are making payment in lumpsum then consideration value of the flat in the ratio of contribution. If making payment in installments then installment value.

3) It should be clearly mentioned in the purchase deed. Share in the property and payment made by each owner should be clearly spell out in the deed. Payment should be made from respective individual account as per their share in the property. 

4) Before executing the deal, prepare agreement to sell how to settle the entire process. Also check whether the property is mutated in the seller and any encumbrance on the property. Get the report from the sub-registrar office.

5) File Form 26QB within 30 days from the end of the month in which payment is made.

6) Also confirm whether the seller is resident or non-resident.In case of non-resident, tax implications will be different.

Vivek Kumar Arora
CA, Delhi
4863 Answers
1052 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

-Three Separate payment shall be made by respective co-owners by quoting respective PAN in form 26QB. Each Co-Owner shall pay TDS on their Co-ownership ratio.

 

Form 26QB needs to be filled in by each buyer for unique buyer-seller combination for the respective share. 

 

Forexample, in case of two buyers and two sellers, four forms must be filled for respective shares.

 

-As per contribution ratio.

If you are making payment in installments then installment value.

 

-It should be properly documented in purchase deed.

 

We have handled such cases before.

 

We may assist you in entire procedure.

 

It is advisable to take a phone consultation for detailed discussion.

 

Payal Chhajed
CA, Mumbai
5188 Answers
291 Consultations

5.0 on 5.0

Dear Sir,

If you jointly purchase an immovable property, then as per the provisions of income tax you need to deduct TDS in the proportion of your ownership separately.

Thanks and regards

Shiv Kumar Aggarwal 

Shiv Kumar Agarwal
CA, Delhi
489 Answers
74 Consultations

5.0 on 5.0

1. Yes.

2. Instalment value

3.IT'S better to have it documented in deed 

Vidya Jain
CA, Kolkata
1012 Answers
58 Consultations

4.8 on 5.0

1. Yes TDS will be applicable on the amount of payment made by each person. if the total value of flat exceeds 50L.

2. Yes seperate 26QB is required for each buyer. TDS will be deducted on instalment value.

3. The payment contribution ratio should be documented in sale deed.

Ruchi Goel Anchal
CA, Gurgaon
525 Answers
16 Consultations

5.0 on 5.0

Hi

Yes you each one need to deduct TDS separately and fill separate form 26QB.

It will be on installment value.

In purchase deed you need to mention contribution ratio.

 

Karishma Chhajer
CA, Jodhpur
2450 Answers
29 Consultations

5.0 on 5.0

If you are co borrowers to loan, banks do mention the ownership ratio. Else, you can decide the ration amonst yourself and take TDS deductions.

Ruchi Goel Anchal
CA, Gurgaon
525 Answers
16 Consultations

5.0 on 5.0

Please call personally for detailed discussion.

Vivek Kumar Arora
CA, Delhi
4863 Answers
1052 Consultations

5.0 on 5.0

1. Yes, each co-owner will have to deduct TDS separately and file the TDS return cum challan.

 

2. Consideration of flat need not to be split. Installments will be split.

 

3. You need to document it in your agreement with the builder.

Lakshita Bhandari
CA, Mumbai
5687 Answers
912 Consultations

5.0 on 5.0

1. No, builder should agree to it. He can very well modify the agreement the way it is commercially feasible.

 

2. When you register the property, it should be registered in the same ratio.

 

3. It's not recommended.

 

4. TDS deduction will be in the ratio of each person making the payment.

Lakshita Bhandari
CA, Mumbai
5687 Answers
912 Consultations

5.0 on 5.0

Hi,

 

Please find below answer step by step:

 

1 Yes you need to deduct TDS separately from each individual in ratio you agreed mutually.

2. yes separate payment from each individual account need to be done.

3. yes the ratio must be documented in registry. 

 

Also you should open a separate bank account in which 3 of you send amount on monthly basis, so that it will help you in future to prove the deduction.  

 

other related quarries.

 

1. apply loan jointly and mention your shares in registry.

2. mention your shares in registry.

3. yes ratio and payment done by three of you in mutually agreed ratio.

4. three separate TDS payment.  

Gourav Arora
CA, Delhi
11 Answers

Not rated

Hello,

 

1. Yes, each owner would be required to deduct TDS.

2. Installment value.

3. It needs to be documented in the agreement.

I hope this answer satisfies your requirements. 

 

Regards,

CA Hunny Badlani

Hunny Badlani
CA, Madhya Pradesh
2608 Answers
16 Consultations

5.0 on 5.0

The ownership ratio should be mentioned. In case it is missed, it becomes equal by default.

Hunny Badlani
CA, Madhya Pradesh
2608 Answers
16 Consultations

5.0 on 5.0

Hi

No Agreement show clearly states each one ratio you need to modify agreement.

Registration of property should be done in ownership ratio.

No

Tds will be deducted in the contribution ratio.

Karishma Chhajer
CA, Jodhpur
2450 Answers
29 Consultations

5.0 on 5.0

Yes each and every person making payment needs to deduct TDS and file separate Form 26QB.

What is the difference between contribution value and installment value?

It will be documented based on who make what payment.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4280 Answers
98 Consultations

5.0 on 5.0

Ownership will depend on the amount contributed by each member and yes TDS will be deducted similarly.

Naman Maloo
CA, Jaipur
4280 Answers
98 Consultations

5.0 on 5.0

Ideally the law requires each co- owner to deduct taxes on their share of payments. Each of the vo-owner is required to deduct taxes and file return and issue certificate.  

It would be great if the purchase agreement would have specified the percentage of ownership in property and hence you all can accordingly follow proportionately. 

in the absence of specifics in agreement , there can be a separate memorandum of understanding  signed between 3 co owners giving details of payments, share and usuals.  The Tds has to be Deducted proportionately. 

 

Jasmina Jain Shah
CA, Greater Mumbai
454 Answers
4 Consultations

5.0 on 5.0

1. No, it is not correct.

 

2.It should be recorded in purchase deed.

 

3.It is not advisable.

 

4. No. It should be based on contribution ratio.

If you are making payment in installments then installment value.

 

Payal Chhajed
CA, Mumbai
5188 Answers
291 Consultations

5.0 on 5.0

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