1% TDS deduction by buyer
I am buying an under-constructed property from Builder and I have taken a bank loan for that. The payment will be made in installments as the construction progresses. So, when slab "x" will be constructed, then builder will send Demand letter to bank and Bank will prepare the cheque and give amount to builder.
As per my understanding, as a buyer, I have to deduct 1% TDS for every installment Bank is paying to Builder. But, bank is saying that they will pay the complete amount asked in the "Demand letter" and they will not get involved in TDS.
- How can I still deduct TDS from each installment that bank pays to builder? Can Seller write in "Demand letter" that 1% will be deducted for TDS and ask final amount from Bank after deduction?
- Is there a way I can pay complete TDS in one go (instead of installments) before bank starts making payment to the builder? And then deduct TDS at the end or during possession?
- Do I also need to deduct TDS from Token amount and Downpayment? I paid token amount few months back and I did not know about paying and deducting TDS for it. If I pay TDS to govt now for the amount already paid to Builder, how can I deduct TDS from builder? should I ask builder for refund or should I deduct in next installment?
Asked 21 days ago in Property Tax
I talked to builder and he mentioned that they cannot specify TDS amount in demand letter (as they are following a standard format). And, the bank is saying that they will not deduct TDS from their end and pay the exact amount mentioned in demand letter. So, both the parties are not letting me deduct the TDS.
What are the options available for me in this case -
1. I can pay complete TDS at one shot and try to adjust it in next installment or from final amount. Will it a problem if I do not pay TDS in installments?
2. Also, how much difficult it is to get refund from builder later on?
Asked 21 days ago