• TDS not deducted by the Buyer

While making payment (greater than 50 Lac) to the seller the buyer has to deduct 1% TDS u/s 194IA of the Income Tax act and deposit the TDS amount so deducted within specified time. In case the buyer fails to deduct the TDS and pays 100% of the sale procedds to the seller, what are the duties and responsibilies of the seller?
Asked 1 year ago in Capital Gains Tax

There are no duties and responsibilities of the seller.

It was buyers duty to deduct and deposit TDS.

If buyer fails to deduct and deposit TDS he could be charged with late fees and interest or he could deposit TDS and ask for a refund from seller if TDS was mentioned in sale deed and more payment has been made then what was mentioned in sale deed.


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Naman Maloo
CA, Jaipur
4272 Answers
97 Consultations

5.0 on 5.0

If the payer fails to deduct the whole or any part of the tax on the sum paid to a RESIDENT then payer shall not be deemed as an "Assessee in default" provided the payee resident

- has furnished his return of income u/s139

- considered such sum for computing income in such return of income

- and has paid the tax due on the income declared by him in such return of income


and the payee furnishes a certificate to this effect from a CA in Form 26A.


Deposit TDS@1% per month from the date when TDS was deductible and tax was actually paid by the payee. 


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Vivek Kumar Arora
CA, Delhi
4840 Answers
1037 Consultations

5.0 on 5.0

The failure to deduct TDS will make the transferee an assessee in default. There will not be any default in respect of the seller in this case. 

The seller will pay tax on his income while filing his Income Tax Return.  

Puja Sharma
CA, Jaipur
66 Answers

Not rated

The buyer is responsible for deduction of tax at source and any failure will attract interest and penalty. 

The buyer  may request the seller to remit the TDS amount as any way he can claim this tax in his income tax assessment while filing his tax return. 

The seller has no specific responsibility if the buyer does not deduct tax but in any case, he has to pay tax on capital gains. He may co-operate with the buyer by remitting the TDS on his behalf and avoid unnecessary problems to him, as in any case, he can take credit for the TDS in his tax return. 

B Vijaya Kumar
CA, Hyderabad
1001 Answers
124 Consultations

5.0 on 5.0

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