You can deduct and deposit TDS at rate one percent total sale value to the builder if both agreement are to be registered and same can be deposited with department . You need TAN number and has to file TDS returns in PAN of the builder.
Tds
I am buying a flat from a builder. There are two agreements. One is for sale of UDS and the other is construction agreement. Both are to be registered in Tamilnadu. The sale deed for UDS is 30 lacs and for construction is 110 lacs. I have to enter in to an agreement for which the builder is asking me to deposit 20 lacs. The balance, I am paying in one lump sum, that is 120 lacs. How should I deduct TDS. and how in the the document the TDS deduction is to be worded.
Asked 7 years ago in Property Law
Religion: Hindu
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9 Answers
under section 194 -1A of Income Tax Act, if you make a payment towards purchase of immovable property for an amount of Rs. 50,00,000 or more than you have to deduct tax @1%
2) If advance payment is being made then TDS would be required to be deducted at the time of advance payment itself. Payments in Installments If payment is made in installments, the TDS would be required to be deducted at each such installment
3) for Rs 20 lakhs payment made TDS has to be deducted and balance payment . Similarly for Rs 120 lakhs TDS has to be deducted at 1 per cent
4) Tax so deducted should be deposited to the Government Account trough e-tax Payment option (Net banking) or any of the authorized bank branches. Any sum so deducted under section 194 IA shall be required to be paid to the credit of the Central Government within a period of seven days from the end of the month in which the deduction is made
5) PAN of seller as well as buyer should be mandatorily furnished in an online Form 26QB for furnishing information regarding the property transaction
Anyone buying real estate worth more than Rs 50 lakh has to deduct 1% of the price of the property before paying the seller. That 1% TDS has to be deposited with the tax department using Form 26QB.
For payment of TDS amount you may follow the following procedure:
Income Tax Department
- Go to TIN NSDL website ( www.tin-nsdl.com ).
- Under 'TDS on sale of property', click on "Online form for furnishing TDS on property (Form 26QB)" or click here.
- Select the applicable challan as "TDS on Sale of Property".
- Fill the complete form as applicable.
Section 194IA of Income Tax Act, requires a buyer to deduct tax at the rate of 1% of the sale consideration, if the value of the transaction is Rs 50 lakhs or more. This section covers residential property, commercial property, as well as land.
The purchaser of the property has to deduct the TDS, either at the time of executing the conveyance deed, or at the time of payment of advance in case any advance is being paid before the execution of the conveyance deed. The buyer has to deposit the TDS amount to the credit of the central government, within 30 days from end of the next month in which the tax is so deducted. For payment of the TDS and furnishing other particulars, you have to fill in Form-cum-challan No 26QB. If a property has more than one buyer and/or seller, you need to fill in separate Form 26QB for each set of buyer and seller. The details of all buyers and sellers, have to be submitted in each Form 26QB.
Dear Client,
TDS will be 1% of sale amount and same shall be mention in sale deed. You can deduct while paying first installment.
The buyer has to deduct TDS @ 1% of the total sale consideration. Note that the buyer is required to deduct TDS, not the seller. No TDS is deducted if sale consideration is less than Rs 50 lakh. If installments are being paid, TDS has to be deducted on each installment.
Seller you have to provide PAN or else TDS is deducted at 20%. TDS has to be deposited along with Form 26QB within 7 days from the end of the month in which TDS was deducted.
Dear Sir,
Please ask your above question on www.taxfull.com which is sister concern of www;kaanoon.com, where is experts will be Chartered Accounts.
Any person who purchases immoveable property worth more than Rupees fifty lakhs has to deduct Tax at 1% on the amount payable( price of the property) to the seller and remit it to the Tax Department. Form to be used is 26QB.
TDS is applicable to the total price and not the amount exceeding 50lakhs.
This has to be deposited with the department within seven days from following the month of making the payment.
For every payment you make to builder, you have to deduct TDS at prescribed rate
So even if you pay consideration in parts, you have to deduct TDS on each part
Write in agreement-
All payments are subject to TDS deduction
If you are entering into agreement then the UPS will not attract any deduction of tax but in any other case the agreement for construction will definitely attract TDS @ 1% on the entire amount on Pro Rata basis
For real estate more than 50 lakhs 1 percent TDs will be applicable and should be deducted and deposit with tax authorities as per form 26QB
