TDS in case of composite agreement during purchase of flat in Bangalore
9 months ago
Hello
I have query regarding TDS on purchase of flat in Bangalore.
Builder has made two agreements, one for sale agreement of plot and other for construction.
Plot sale was quoted as 50lakh and construction cost is quoted as 35lakh.
Can you please let me know, if in above case do I need to pay any TDS? If yes, can you please let me know if TDS need to be paid on only plot sale cost or full value ?
A.Dear client,
Taxes play a significant role in the purchase or sale of real estate in India. Tax Deducted at Source (TDS) on the sale of property under Section 194-IA is one such tax. Here, the term "property" exclusively refers to tangible items like buildings and land. When buying a property, the buyer is required to deduct tax before paying the seller. In India, 1% of the entire transaction consideration is deducted as TDS when buying real estate. All property kinds, including residential, commercial, and industrial ones, are subject to this charge. TDS must be withheld at 20% if the seller's PAN number is not readily available. The buyer must subtract TDS at a rate of 1% if sale consideration is 50 lakhs or above but from 01/04/ 2022, TDS is required to be deducted if stamp duty value of property is also 50 lakhs or more.
Taxes play a significant role in the purchase or sale of real estate in India. Tax Deducted at Source (TDS) on the sale of property under Section 194-IA is one such tax. Here, the term "property" exclusively refers to tangible items like buildings and land. When buying a property, the buyer is required to deduct tax before paying the seller. In India, 1% of the entire transaction consideration is deducted as TDS when buying real estate. All property kinds, including residential, commercial, and industrial ones, are subject to this charge. TDS must be withheld at 20% if the seller's PAN number is not readily available. The buyer must subtract TDS at a rate of 1% if sale consideration is 50 lakhs or above but from 01/04/ 2022, TDS is required to be deducted if stamp duty value of property is also 50 lakhs or more.
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A.Dear Client,
When it comes to buying or selling of property in India, taxes are an important part. One such tax is the Tax Deducted at Source (TDS) on the sale of property under Section 194-IA. Property here refers to only immovable property like land and buildings. Before making a payment to the seller, the buyer has to deduct tax at the time of purchasing a property. The TDS rate for the purchase of immovable property in India is 1% of the total sale consideration. This rate applies to all types of properties, whether residential, commercial, or industrial. If the PAN number of the seller is not available then the TDS is required to be deducted @ 20%. Buyer is required to deduct TDS at the rate 1% if sale consideration is 50 lakhs or above but from 01/04/ 2022, TDS is required to be deducted if stamp duty value of property is also 50 lakhs or more. This means TDS is required to be deducted if stamp duty value of property i.e, MV as accessed by the RA or sale consideration exceeds 50,00,000. In your case, the total purchase price or acquisiton cost of property comes in reference to both the Agreements is Rs.50L + Rs.35L=Rs.85 Lakhs, so you are required to deduct a sum of Rs.85 K towards TDS @1% from the total sale consideration value of the property i.e, of Rs.85 L of from the Seller-cum-Builder on or before payment of full consideration money and the TDS so deducted shall be deposited against the PAN of Seller/Builder in compliance with the Section 194-IA of the I T Act failing which buyer may be penalised for such lapse on his part. You may consult the matter with an Advocate for guidance and steps.
When it comes to buying or selling of property in India, taxes are an important part. One such tax is the Tax Deducted at Source (TDS) on the sale of property under Section 194-IA. Property here refers to only immovable property like land and buildings. Before making a payment to the seller, the buyer has to deduct tax at the time of purchasing a property. The TDS rate for the purchase of immovable property in India is 1% of the total sale consideration. This rate applies to all types of properties, whether residential, commercial, or industrial. If the PAN number of the seller is not available then the TDS is required to be deducted @ 20%. Buyer is required to deduct TDS at the rate 1% if sale consideration is 50 lakhs or above but from 01/04/ 2022, TDS is required to be deducted if stamp duty value of property is also 50 lakhs or more. This means TDS is required to be deducted if stamp duty value of property i.e, MV as accessed by the RA or sale consideration exceeds 50,00,000. In your case, the total purchase price or acquisiton cost of property comes in reference to both the Agreements is Rs.50L + Rs.35L=Rs.85 Lakhs, so you are required to deduct a sum of Rs.85 K towards TDS @1% from the total sale consideration value of the property i.e, of Rs.85 L of from the Seller-cum-Builder on or before payment of full consideration money and the TDS so deducted shall be deposited against the PAN of Seller/Builder in compliance with the Section 194-IA of the I T Act failing which buyer may be penalised for such lapse on his part. You may consult the matter with an Advocate for guidance and steps.
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