Date of TDS deduction under Section 194-IA for individual home buyer

Dear Sir,

Hope you are doing well.

No. A builder's demand note dated 2 March 2026 does not by itself constitute a "credit" event for an individual home buyer under Section 194-IA.

In your case, since you did not credit the builder's account in any books before payment, the TDS obligation triggered on the date of actual payment (RTGS) — 10 April 2026.

Therefore:

• 
  Date of TDS deduction: 10 April 2026
  
• 
  Month of deduction: April 2026
  
• 
  Financial Year: FY 2026–27
  
• 
  Reason: TDS under Section 194-IA is deductible at the earlier of credit by the buyer or actual payment. Here, there was no earlier credit, so payment is the triggering event.
  

Thanks & Regards,

Payal Chhajed

The builder is not correct. Their recording of the demand in their books on 2 March 2026 does not determine your TDS liability under Section 194-IA. For an individual buyer, TDS is deducted on the earlier of (i) credit by the buyer in their own books, or (ii) actual payment. Since you did not credit the builder's account before making payment, the TDS obligation arose on 10 April 2026, when the RTGS payment was made. Therefore, your deduction correctly falls in April 2026 (FY 2026–27), and there is no need to revise it to March 2026 based solely on the builder's accounting treatment.

Dear Querist,

No, the builder’s accounting entry does not determine your TDS date. TDS arises when you credit the amount to the builder’s account or actually pay it, whichever is earlier.

A demand note alone is not a credit entry in your books. Therefore, if you made no earlier accounting entry and paid on 10 April 2026, deduction falls in April 2026. 

For a more detailed review of your case, you may book a phone consultation.

CA Shubham Goyal