New law of 1% tds on selling property worth 50 lac and above
SUKHVIR HOUSING AGENCY
(Querist) 15 July 2013
This query is : Resolved
Thanks to All experts,
Kindly educate me on the following :
Mr.X sold his residential property vide Agreement for Sale on 30.05.2013 by receiving 20% of the consideration value, and the Buyer's Bank (thru whom buyer took housing loan) did disbursement of balance part part payment on 10.06.2013.
Since 1% TDS is applicable from 01.06.2013, so in such a case Is TDS applied on this Transaction as the Agreement was registered on 30.05.2013
your valuable suggestion is awaited.
Advocate M.Bhadra
(Expert) 15 July 2013
Every transferee, while making payment or crediting any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall deduct tax, at the rate of 1% of such sum, if tThe TDS (Tax Deducted at Source)start from June 1 with the implementation of Section 194-IA, announced in the finance budget of 2013-14. As per this section, the buyer should provide TDS documents on transfer or sale of immovable property (mainly land or house) other than agricultural land, before registering the property. The sub-registrars is authorize to see, if such transactions take place and TDS documents are not provided. This is applicable only if the transaction is Rs 50 lakh or above.
Rajendra K Goyal
(Expert) 16 July 2013
For Property above Rs. 50 lacs, any payment full or part made for this after 01.06.2013, TDs @ 1% is to be deducted and to be deposited.
R.V.RAO
(Expert) 21 February 2014
banker will release final house loan balance only on regd.sale deed basis.
if the regd.sale deed shows property price as Rs.50 lacs/or more banker is liable to deduct TDS @1% under sec 194IA.
else he is liable .
Anirudh
(Expert) 21 February 2014
Dear Mr. R.V.Rao,
The bank is only lending money. It is not the buyer of the property. Therefore Bank is not obligated under any provisions of the law to deduct TDS of 1%. It is only the ultimate buyer, who utilising the loan obtained from the bank would be making payment of consideration to the vendor, is liable to deduct 1% TDS on the consideration value.
R.V.RAO
(Expert) 22 February 2014
why banks do it?
pl. recollect cases where banks /home loan cos.release final loan balance to seller directly after property regn.(and collect regn. docs as security) does it make sense that they give money first to buyer, ask him to deduct 1% and then return the balance to the bank who will then pay the amount to seller?
is it not circuitous? is it not avoidable?
to cut short such above avoidable delay and also to ensure statutory payment under 194IA is made so that bank security is properly made ,banks do this.
this is not any social service.
But enlightened self interest
Anirudh
(Expert) 22 February 2014
Dear Mr. S.V.Rao,
I am concerned with your statement that "else he (banker) is liable".
The bank may do it for convenience. That is altogether a different thing. In any case banks do not lend 100% towards purchase of the property? The difference between the consideration and the loan amount has to be paid by the buyer. In which case, the buyer has to deduct the 1%.
Therefore, leagally speaking, banker is not liable to deduct 1% TDS. If he has not deducted TDS, income tax department cannot question him. That is what I want to highlight.
R.V.RAO
(Expert) 22 February 2014
sri anirudhji.yes.IT dept.cannot find fault with bank .
The banks own security interest will be affected ,besides TDS defaults are seriously viewed by IT dept.
Anirudh
(Expert) 22 February 2014
Dear Shri R.V.Rao,
Thank you. When the IT department takes TDS issues seriously, in this case it will take it seriously against the buyer only.
I am unable to understand what you mean by saying Bank's security interest? Do you mean to say that if the TDS is not deducted by Bank, or if TDS is not deducted by the buyer (i.e. borrower of the bank), the bank will suffer any security in regard to the amount lent by it?
