Tds on flat purchase : section 194-ia
Smrithi
(Querist) 28 November 2013
This query is : Resolved
I am planning to purchase Flat worth 58 Lakhs at market rate.All transactions are through cheques (account to account - no cash involved).Both "seller" and "buyer" are based in India and have PAN number.The amount 58 Lakhs is mentioned in Sale-Agreement, Loan Application (also yet to be executed Sale-Deed).As a buyer, I am registering the Flat at 58 Lakhs and paying full stamp duty.
I have conveyed to the "seller" about recent section 194I-A, which says TDS 1% needs to be deducted and Form26QB and Form16B needs to be generated.I plan to mention that TDS - 58,000/- has been paid using chalan number XYZ in the Sale Deed document along with other Cheque numbers.
1) "Seller", asks me not to deduct this TDS amount and that he will deal with Income Tax.
Kindly clarify if I can give him the entire 58 Lakhs and let him deal with it however he likes.
2) Also can I convince "Seller", that he will be able to get this Rs 58,000 back from Income Tax Department after filing IT-returns ?
Kindly clarify if the "Seller" will be able to get back this Rs 58,000 using Form16B from the Income Tax Department if he utilities the capital gains appropriately ( as described in Section 54 or some relevant section ).
3) Moreover, "seller" says all expenses like stamp duty, registration and other incidental expenses for the registration are to my account.Hence he expects me to give him Rs 58,000 separately through cash or some-other cheque which is not mentioned in the Sale-Deed.In the worst case, kindly clarify If I can proceed by giving this extra 58,000 ?
Thank you in Advance
ajay sethi
(Expert) 28 November 2013
consult your CA . better deduct TDS . dont rely upon seller assurances
Rajendra K Goyal
(Expert) 28 November 2013
Deduction of TDS and depositing it with the Government is mandatory and you have no option as per Rule. If the seller is having no liability he can get refund after filing the return.
BAALASUBRAMANNYAMM
(Expert) 28 November 2013
(1)Here the buyer has to bear the Stamp Duty, Registration Charges and other incidental charges.
(2)with regard to 1% of TDS, the buyer has to deduct the amount and give the balance to the Seller.
Pls. read the Act as follows:
‘194-IA. Payment on transfer of certain immovable property other than agricultural land.—(1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent. of such sum as income-tax thereon.
