since both have equal share in property cheque should be issued in proportion to their share and TDS deducted accordingly
What will be the consequences for paying TDS unequally for Property Sale among joint sellers?
I am buying a property (a flat) from joint owners. They each have 50% ownership of the property. However the sellers are asking me to pay the consideration amount unequally as well as TDS amount unequally as well. So, for Sale Value of 60lac, Instead of 50% 50% division of Sale Consideration, they are asking for 80% 20% division. Also they ask me to pay the 1% TDS in the same ratio. The Sale Deed will mention particulars of all transactions and will be signed by both sellers. What will be the legal consequences for this transaction? (Both for me (the buyer) and the sellers?
Asked 6 years ago in Taxation
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10 Answers
I% TDS will deduct on 60 lacs i.e. rs.60,000.
Rs. 48,000 will deduct from 80% payment and rs. 12,000 from 20%. Both`s PAN no.will require.
You may get affected in income tax scrutiny if found
The buyer has to deduct TDS at 1% of the total sale consideration. Note that the buyer is required to deduct TDS, not the seller. No TDS is required to be deducted if sale consideration is less than Rs 50 lakhs. If the payment is made by installment, then TDS has to be deducted on each installment paid.
Please note. The question is the sellers have equal property share. but they are asking for unequal TDS division. Is there any consequence for me (the buyer)? because government is getting the same tax, only the division of tax among sellers is different.
Asked 6 years ago
1. You cn go for this transaction as TDS should be deducted on total consideration so it doesn't matter in which ratio they are taking the consideration.
2. The TDS should be deducted from total amount of consideration.
Unequal tds is not correct
You must deduct TDS in proportion to share of each co owner in property
since both have 50 per cent share in property cheque should be issued in same proportion and TDS deducted
Get this from them in written to make unequal payment and same will mention in sale deed too.
That's it
In any case you are required to pay the sale consideration amount.
What is your concern if they demand payment in that proportion?
However if you want to ascertain that the less claimed seller may create any problem in future in this regard about the disparity in payment, then you may obtain an affidavit from them to this effect and also an indemnity bond to indemnify you against any loss in this connection in future.
You may consult an advocate in the local before venturing into the said purchase.
If you are required to pay the tax then you may have to deduct the tax at source out of the sale consideration amount, hence you may decide whether to deduct the same or not before making the final payment.