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Old July 23 2013, 05:20 AM   #1
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Default 1% TDS question

Hello All,

Last year we purchased a under construction property in Pune. The flat amount is greater than Rs. 50L. We registered our flat in Feb 2013 in Pune. The construction is scheduled to complete in 2nd quarter of 2015. We both applied for PAN card when we were there in Feb. The property is jointly owned/Leased by me and my wife. This is a 999 year lease.

We recently became US Citizens. I recently came across the rule of 1% TDS on all real estate transactions. Last week I paid my 4th installment to the builder without deducting 1% TDS. I became aware of this rule yesterday. All previous installments were paid before Feb 2013.

1. My installment consist of builder amount and service tax. Do I deduct 1% on builder amount only or on the total amount? I am also paying 1% VAT which is due at the time of possession.

2. How do I go about deducting 1% TDS after the fact? Can I ask builder to refund me 1% of the amount paid to him last week or do I just pay the amount from my pocket now and ask the Builder to increase my payment amount by 1% when he issues me the receipt for this payment? For example, if I paid builder Rs. 5L then I can have builder either issue me a refund of Rs. 5,000 and issue me a payment receipt of Rs. 5L or I can pay Rs 5,050 TDS from my pocket for now and ask Builder to give me a receipt for Rs. 5,05,000 builder amount.

3. Do I need to deduct TDS on all previous amounts paid to the builder? If so, how do I go about doing it?

4. Do I need to include other amounts (One Time Maintenance Fund, Parking Fees, Registration Charges, Utility Charges, Infrastructure charges etc.) into consideration when calculating 1% TDS?

5. How do I go about filling out forms for 1% TDS? I have Builder's PAN Number. I also have NRE Account from which I can disburse the payment electronically. Where do I begin?

Appreciate any help in this regard.

Old July 23 2013, 10:58 AM   #2
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There is not a whole lot of clarity on this system yet but also read the dedicated thread at

If you are a NRI, then a higher TDS % may apply. Please see the link below

Indian tax laws give NRIs a raw deal - The Economic Times
Old July 23 2013, 11:06 AM   #3
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