TDS on purchase of property
06-Sep-2023 (In Property Law)
Purchased a property in Bangalore in September 2015. It is worth over 50 lakhs. I have made at least 3 disbursements to the builder summing 65 lakhs. I have not made any TDS deductions yet.When do I have to pay for it?
Any person who purchases immoveable property worth more than Rupees fifty lakhs has to deduct Tax at 1% on the amount payable( price of the property) to the seller and remit it to the Tax Department. Form to be used is 26QB.
TDS is applicable to the total price and not the amount exceeding 50lakhs.
This has to be deposited with the department within seven days from following the month of making the payment.
In case you have paid in installments, then, TDS has to be deducted each time of making the payment. If you fail to do so, it will attract penalty of upto Rupees one lakh under Section 271H. It also attracts late filing interest.
Under Section 201 the interest is @ 1% per month if tax is not deducted. If you have deducted and not remitted it is @ 1.5% per month. The interest is calculated from the date of payment you have made. If it is by installments, the interest has to be calculated from those dates when payments were made.
NOTE: Section 234E speaks about late fee on interest payable of Rs200 per day subject to maximum of tax dues.
In your case, the corrective step to avoid penalty would be to pay the TDS due along with applicable interest and late filing fee. Next, see if you can convince the seller and recover from him.
Dr. Gubbi S Subba Rao, Advocate, Bangalore
TDS is applicable to the total price and not the amount exceeding 50lakhs.
This has to be deposited with the department within seven days from following the month of making the payment.
In case you have paid in installments, then, TDS has to be deducted each time of making the payment. If you fail to do so, it will attract penalty of upto Rupees one lakh under Section 271H. It also attracts late filing interest.
Under Section 201 the interest is @ 1% per month if tax is not deducted. If you have deducted and not remitted it is @ 1.5% per month. The interest is calculated from the date of payment you have made. If it is by installments, the interest has to be calculated from those dates when payments were made.
NOTE: Section 234E speaks about late fee on interest payable of Rs200 per day subject to maximum of tax dues.
In your case, the corrective step to avoid penalty would be to pay the TDS due along with applicable interest and late filing fee. Next, see if you can convince the seller and recover from him.
Dr. Gubbi S Subba Rao, Advocate, Bangalore
Helpful?
38+
Circle rate of property
How to calculate property value as per circle rate
Selling property above circle rate in india
Sale of immovable property at more than stamp value
Purchase of agricultural land below circle rate
Sale of property for less than fair market value
Selling property above circle rate example
Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.
Connect with top Property lawyers for your specific legal issue
No Comments! Be the first one to comment.
"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."