TDS on purchase of property

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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

Advocate Dr. Gubbi S Subba Rao LawRato