• Late fee for late filing of TDS on purchase of flat

Hi, I have been fined a big amount as late fee for late filing of TDS on purchase of a flat. I wasn't informed by my seller about it. And also the bank issuing the loan also failed to advise me on it. 
I paid the full price of the flat which includes the TDS to the seller. I was informed about the TDS months after I made the payment. 
Is there a way to reduce the fine amount?
Asked 5 years ago in Income Tax

Dear Sir,

Can you please share details of date of sale deed with amount and date at which various payments made along with amount of payment and date of payment of TDS along with copy of form 26qb so that I can suitably guide you for action. My email id is vishrut1303@gmail.com

There can be some ways by which we can do something.

Also confirm residential status of buyer and seller

Vishrut Rajesh Shah
CA, Ahmedabad
804 Answers
30 Consultations

5.0 on 5.0

Dear Sir,

Considering the facts of the case, if any of the following two conditions are satisfied, then you don't need to deduct TDS.

1. Seller is a NRI

2. Immovable property which you have purchased is an agricultural land.

Please feel free to call/revert in case of any doubts

Thanks and Regards

Abhishek Dugar


Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0


TDS is applicable on purchase of flat only if both the following conditions are satisfied:

1. The purchase price is Rs. 50 Lakhs or more

2. The seller is a resident in India

So, first check whether TDS is applicable. If TDS is not applicable, there is no cause of action at all.

If TDS is applicable, the demand may comprise of TDS amount, Interest u/s 201(1A) and Late fee u/s 234E.

However, since you have already paid the full purchase price of the Property to the Seller, you can claim the benefit as per First Proviso to Section 201(1A) subject to the conditions mentioned therein. This will waive off your TDS and Interest liability. Also, if the TDS liability is waived off, then there is no need to File TDS Return which in turn will nullify the Late fee u/s 234E.

Request you to send all the Transaction details to my Email ID pradeep@capradeepbhat.com so that I can guide you better in this regard.

Pradeep Bhat
CA, Bengaluru
542 Answers
91 Consultations

5.0 on 5.0


It is compulsory to deduct TDS on purchase of property above Rs 50 lacs @ of 1% and pay the same in the government account. Failure to do so attracts interest as well as penalty u/s 234E of Rs 200 for non filing of return umder on time. However under genuine circumstances the assessee may write to the assessing officer to waive the penalty u/s 234E under genuine circumstances to avoid undue hardship to the assessee.

You may request the officer to waive the fee u/s 234E. There is a CBDT circular which has asked for recommendations of such circumstances.

On the other hand the interest on delayed payment shall have to be paid.

Thanks & regards


Ria Nagpal
CA, Ahmedabad
49 Answers
5 Consultations

5.0 on 5.0

You ought to have deducted tax at the time of making the payment for purchase of flat. The Dept. is right in imposing the interest and penalty.

However, if the seller has paid tax on the sale of property, you may represent to the Dept to waive the compliance requirement. The overall objective is to ensure that taxes due are paid. Now if you deduct tax and make the payment, the seller will not be able to claim the credit and even you will not be able to recover it from the seller.

If the seller has not yet paid tax on the sale of property, you can now pay the TDS along with interest and ask the seller to reimburse you the same.

B Vijaya Kumar
CA, Hyderabad
960 Answers
117 Consultations

5.0 on 5.0

Hello Sir,

There is no other way to save up on TDS. All you can do is negotiate with your seller that you are paying it on his name, if he can transfer the funds on your name after claiming a refund.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.


Rohit R Sharma


Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

Sir there is no way to avoid the late fees

Shyam Sunder Modani
CA, Hyderabad
1408 Answers
159 Consultations

5.0 on 5.0

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