No.
TDS has to be deducted on each and every payment irrespective of the date of transfer.
So you will have to deduct TDS @1% on all payments excluding the amount of GST to be paid.
1% TDS on the total sale price or individual amounts
I am purchasing a flat at DLF New Town Heights Kolkata worth more than 50 lacs. This flat is on freehold as the seller has not yet taken the possession letter. As a standard resale procedure in DLF and also as agreed with the seller, I have to pay a token amount to the seller (5%), then I have to pay 20% after signing the sale agreement and the rest will be payed after the seller has submitted his documents to DLF for name transfer. This entire process shall not last more than 2 months. My question is: it is necessary to deduct 1% TDS on all these amount or should deduct it on the total sale amount after the sale agreement is signed? I believe that these amounts (5%, 20% and the rest) cannot termed as 'instalments' with respect to Form 26QB, right?.. because instalments are generally defined in accordance with a payment scheme like for an unconstructed property, which is not my case. Greatly appreciate your help on this and sorry for the verbosity in my query..
Asked 6 years ago in Property Tax
Thanks for the reply. In that case, what should I put as 'Date of Agreement/Booking' in Form 26QB. Will it be the date on which I pay my token amount of 5%.. as the agreement will be signed few weeks later.
Asked 6 years ago
If actual date of agreement is unknown, consider the date of booking. It shall be at the time of payment of 5% of the amount. Obtain a letter from the builder starting the date as booking date.
Actually there is no builder involved here. It is a resale property being purchased directly from the seller. So, can the payment of the token amount to the seller be termed as 'Booking Date' here? Please let me know. If yes, I can then obtain a letter of receipt from the seller stating the date on which the Token amount was paid and use this date as the 'Date of Agreement/Booking' on Form 26QB. Will this be acceptable?
Asked 6 years ago
Yes, this can be done.
No. You need to deduct TDS @1% on every installment.
Further, you can take the date of booking as the date on which you made the 5% payment.
Please feel free to call/ revert in case you need additional clarity/ guidance.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi,
Unfortunately, you will have to deduct tax on every installment. If there is a delay in deduction and payment of TDS, then there will be interest payable. However, there is an alternative where you deduct the entire amount of tax at the time of first installment, then the subsequent installments will not require tax to be deducted since it was already deducted earlier. This can be decided mutually by you and the seller.
You can take the date of first installment as the booking date.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Ask a Chartered Accountant
Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
Ask a CA