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1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

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1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

Last updated: April 27 2017
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  • #41

    #41

    Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

    Originally posted by sanjivmishra View Post
    I booked a flat in Paras Seasons in 2011 in less that 50 lacs. Registry for this flat was done in 2015 in the same rate but circle rate mentioned on the registry is more than 50 lacs. Now I got a notice from income tax department to pay TDS on this as purchase price was more than 50 lacs. As per notice buyer should get this TDS from seller and deposit if not a penalty of 200 rs per day will be there. Builder sold flat for less than 50 lacs so didnt pay the TDS. What can be done in such case. There should be some other people in same situation. Please suggest.
    If registry value is more than 50l then tax dept know it is more than 50l.

    You have 2 options. Contact the tax officer mentioned in notice or contact your ward tax circle officer. Provide them documents as proof and explanation why you did not do. You have valid case and they will exempt you.

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    • #42

      #42

      Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

      TDS for resale house.

      Query - If i buy a house on resale below the circle rate and the cost of property excluding registry is below 50 lakh.
      However, while paying the stamp duty the rate is calculated on circle rate which is higher then the purchase rate and evaluates the property above 50 lakh.
      Will i be deducting TDS?

      Comment

      • #43

        #43

        Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

        Originally posted by vineetbajaj1 View Post
        Query - If i buy a house on resale below the circle rate and the cost of property excluding registry is below 50 lakh.
        However, while paying the stamp duty the rate is calculated on circle rate which is higher then the purchase rate and evaluates the property above 50 lakh.
        Will i be deducting TDS?
        If purchase rate is lower than 90% of the circle rate, then you may be looking at some tax issues/notices/inquieries. Consult a CA or financial advisor.
        TDS is applicable on amount paid, if amount paid to seller is less than 50lacs then you need not deduct it.

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        • #44

          #44

          Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

          Need Help on the issue. 1% TDS. Someone Knowledgeable please answer..


          I am buying a commercial property in resale. The property was originally bought by my seller in 2012 from builder. Prior to June 2013. He made 40% payment around 16.75lac. Total property consideration is around 50.5 lacs for the original buyer.

          I am buying it from the original buyer paying a premium and the total cost to me is now 57.5 lac. On the new agreement paper for me, the cost of property is being shown 49.85 lac. I paying out some component in cash to builder as well to go below 50 lac(As advised by my builder from 50.5 to 49.85). I am paying 7 lac to original buyer in white in check for his premium gain.

          Now should I be deducting the 1% TDS amount of 16.75 + Premium of 7 lac ( 23.75 lac) = 23.75 thousand and deposit against a Challan. and give the form 16b to the seller.

          Now on future payment(60%), how will I handle this as the property price on Paper is still below 50 lac(49.8 lac.

          Further since the seller has got everything in white he will also pay his Capital Gain Tax accordingly. Now if he is paying his Tax then should I still be paying this 1% TDS.

          Please Advice.

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          • #45

            #45

            Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

            Originally posted by jayantNayak View Post
            Need Help on the issue. 1% TDS. Someone Knowledgeable please answer..


            I am buying a commercial property in resale. The property was originally bought by my seller in 2012 from builder. Prior to June 2013. He made 40% payment around 16.75lac. Total property consideration is around 50.5 lacs for the original buyer.

            I am buying it from the original buyer paying a premium and the total cost to me is now 57.5 lac. On the new agreement paper for me, the cost of property is being shown 49.85 lac. I paying out some component in cash to builder as well to go below 50 lac(As advised by my builder from 50.5 to 49.85). I am paying 7 lac to original buyer in white in check for his premium gain.

            Now should I be deducting the 1% TDS amount of 16.75 + Premium of 7 lac ( 23.75 lac) = 23.75 thousand and deposit against a Challan. and give the form 16b to the seller.

            Now on future payment(60%), how will I handle this as the property price on Paper is still below 50 lac(49.8 lac.

            Further since the seller has got everything in white he will also pay his Capital Gain Tax accordingly. Now if he is paying his Tax then should I still be paying this 1% TDS.

            Please Advice.
            I think you will have to deduct and deposit 10% TDS on the Rs 7 lac payment being made to the buyer.

            Please contact a CA for clarification and how you are going to report it in your tax returns to be on a safe side.

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            • #46

              #46

              Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

              Thanks for the response. I am the new Buyer. The seller earns the profit of 7lc. He will deposit the tds on that. But as a buyer do I have to deduct 1% TDS since property value for me now is 57 lc.

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              • #47

                #47

                Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

                Sir,

                Is TDS valid for BBA price or Registry Price? Is registry calculation done as per super area or carpet area? Does BBA show carpet area mandatory?
                Last edited April 27 2017, 12:26 PM.

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                • #48

                  #48

                  Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

                  Originally posted by jayantNayak View Post
                  Need Help on the issue. 1% TDS. Someone Knowledgeable please answer..


                  I am buying a commercial property in resale. The property was originally bought by my seller in 2012 from builder. Prior to June 2013. He made 40% payment around 16.75lac. Total property consideration is around 50.5 lacs for the original buyer.

                  I am buying it from the original buyer paying a premium and the total cost to me is now 57.5 lac. On the new agreement paper for me, the cost of property is being shown 49.85 lac. I paying out some component in cash to builder as well to go below 50 lac(As advised by my builder from 50.5 to 49.85). I am paying 7 lac to original buyer in white in check for his premium gain.

                  Now should I be deducting the 1% TDS amount of 16.75 + Premium of 7 lac ( 23.75 lac) = 23.75 thousand and deposit against a Challan. and give the form 16b to the seller.

                  Now on future payment(60%), how will I handle this as the property price on Paper is still below 50 lac(49.8 lac.

                  Further since the seller has got everything in white he will also pay his Capital Gain Tax accordingly. Now if he is paying his Tax then should I still be paying this 1% TDS.

                  Please Advice.
                  Please state your facts a little more clearly:

                  1. Is the agreement now happening between you and the seller or between you and the builder?
                  2. If it is between you and the seller, then what is the value/consideration written on this agreement? The answer to your query depends on this crucial fact.

                  Do unto others as if you were the others.

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                  • #49

                    #49

                    Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

                    Thanks Ved Sir. Ya the agreement did happen with the seller, on a stamp Paper when we decided to enter into the agreement. But it seems that document will be destroyed once the Builder gets the NOC from the seller. The price mentioned on that agreement is 57 lc all inclusive. This was just a ordinary document to be with the broker till the deal is complete. The builder is planning on giving me a new BBA after getting NOC from seller once all payment 24 lac is made to the seller. The New BBA will have a effective execution date of mid 2014 as promised by the Builder. The rate mentioned on the new BBA with the builder will be 49.85 lc.effective mid 2014. I will be making 60% of the future payments to builder now on 49.85 lc.
                    Last edited April 26 2017, 09:51 PM.

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                    • #50

                      #50

                      Re : 1% Tax Deduction (TDS) On Property Sale From 1st October, 2012

                      If I understand you correctly, this means that you shall pay cheques to the seller (3rd party), whereas the builder will issue a BBA in your favour. Then what is the basis of agreement between you and the builder....and what is the basis of your making payments to the seller (instead of the builder).

                      Or else, is it that the seller is going to surrender the flat back to the builder...and you are going to make all payments total 47.85 afresh to the builder in terms of the new BBA which the builder is going to issue you wef 2014...and only premium amount of 7 to the seller? Therefore, it is the builder who will refund 24 to the seller and not you.

                      Please get it fully clarified.
                      Last edited April 27 2017, 06:19 AM.
                      Do unto others as if you were the others.

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