Upgrad LLM

tds on property purchased in 1995

Dear Sir / Madam,          

Payment of TDS - Registration of Lease-cum-Sale Deed

Purchase of Core House Land in 1995 at Rs.1,49,328/- under Self Financing Scheme

Seller - Odisha State Housing Board, Bhubaneswar of Govt. of Odisha

I had purchased in 1995 one core house under self-financing scheme from Odisha State Housing Board (OSHB), of Govt. of Odisha. Total payments of Rs.4,69,028/- was made to the Board for the core house out of which Rs.1,49,328/- was paid towards cost of the land. The entire amount was paid in advance on and before 31.12.1995 and the possession of the core house was given to me  in 1997.

The lease-cum-sale deed was not executed at the time of transfer of property as the Govt. land was not transferred to OSHB.  Now the lease-cum-sale deed for the land has been executed by the Board which is to be registered at the Sub-Registrar office, Bhubaneswar. 

At the time of registration of the said deed, the Sub-Registrar office insists for payment of TDS as the present Bench Mark Value of the land is Rs.50,68,871/-. But I have paid only Rs.1,49,328/- towards the cost of land to OSHB for the purchase of the land in 1995 and no payment has been made after that for the purchase.

Kindly, therefore, advise me if TDS is applicable for the purchase of land at a cost of Rs.1,49,328/- in 1995 (full cost paid before 1995) for which the lease-cum-sale deed executed in Jan, 2020  is to be registered.

As I am a man of 65 years old and it is not possible on my part to move various place due my old age and age related ailments, kindly send me a reply to enable me to register the said deed as early as possible.

Kindly do the needful.

Thanks and regards.

R N Kar


Dear Sir,

Section 194IA of the Income Tax Act, 1961 deals with TDS on immovable property. It states that Transferee is liable to deduct TDS at time of payment of consideration or at the time of credit of such sum whichever is earlier. This provision had been come in to from June,2013. No deduction can be made if property valus is less than 50 Lakhs rupees. The rate of TDS is 1% on consideration of immovable property.

However, in your case the whole consideration for puchasing a land was paid before December, 1995. At that time lease cum sale deed was not registered due to land being  not transferred to OSHB. Now, it is being registerd at Registrart office and they insisted you to deposit TDS. TDS provision is applicable from June, 2013 and consideration had been already paid in 1995. Section itself clarifies that TDS at the time of payment of consideration of credit whichever is earlier. Payment has been already made before section came into force. So, no TDS would be applicable. This section applies prospectively. 

Conclusion - TDS would not be applicable. 


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