BUILDER IS DEMANDING FULL PAYMENT INCLUDING TDS AND ASKING ME TO PAY TDS

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BUILDER IS DEMANDING FULL PAYMENT INCLUDING TDS AND ASKING ME TO PAY TDS

My builder is asking me to pay full amount including TDS and now asking me to pay 1% TDS also. I said builder that I will pay 1% less than you demanded and will pay 1% TDS in Income Tax Site & send you receipt. But he said You have to pay full amount to us also has to pay 1% as TDS.

1 month ago

Reply

Dear Client,
Section 194IA of the Income Tax Act, 1961 prescribes that a buyer of immovable property that costs more than Rs.50 lakhs is required to deduct TDS @1% on the value of the property while paying the seller/builder. TDS on property must be paid on the full amount of sale and not only the sum above Rs.50 lakh. For instance, if you buy a property with a value of Rs.80 lakhs, TDS will be calculated on Rs.80 lakhs and not Rs.30 lakhs. For payments made in installments, TDS will be deducted on each installment. If the buyer does not obtain the seller's PAN, the rate of TDS rises to 20% of the property value. The TDS on the immovable property must be deposited with the Income Tax Authority using Form 26QB within 30 days from the end of the month when the TDS was deducted. Post deposit of TDS, the buyer is required to obtain Form 16B and issue the form to the seller. So, given the provision of relevant law, the demand of the Builder is illegal and impermissible under the law. In the given scenario, you can file a complaint against the Builder against his illegal demand before the Income Tax Authority, if the housing project is a registered project of RERA then before the RERA or before the Consumer Forum seeking appropriate relief against the unfair trade practices adopted by the builder.