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What are the penalties for non payment of TDS on property sale
27-Apr-2025 (In Property Law)
I am NRI I recently sold a property to an Indian resident and received token money @5lacs via bank transfer. This is documented on a sales agreement.
However buyer did not deduct any TDS.
we are planning to finalise deal in 3 months from now and I do not have a PAN at the moment.
Will the seller face penalty ?
Will the buyer face penalty ?
How much ?
I am thinking maybe to cancel this agreement (refund 5 lacs) and start a new one once I have my PAN. Will this reduce any penalties above?
As per Indian tax laws, when an NRI sells property in India, the buyer is required to deduct TDS (Tax Deducted at Source) at 20% (plus surcharge and cess as applicable) on the sale consideration, irrespective of the advance/token amount. the seller (NRI) face penalty?No, primarily the obligation to deduct TDS lies with the buyer. The seller is not directly penalized for TDS non-deduction. However, if the seller fails to report the income properly while filing the return, or does not file the return due to absence of PAN, penalties and interest could apply later under Income Tax Act, 1961.
Will the buyer face penalty?
Yes,
Helpful?
Adv. Jayatee Chatterjee
Delhi | 5+ Answers
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It’s better you hire and advocate in this case for smooth transaction. PAN Card can be issues in few days Soni need to cancel the deal ..moreover if both parties are agreed then u can even extend the date of ATS.
U must also consult with CA that what’s the other option to submit TDS when PAN Card isn’t available
Thanks n b in touch
Helpful?
Adv. D. Khan
Delhi | 1000+ Answers
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The buyer needs to pay the TDS and not the seller. And TDS is not applicable if transaction is of less than 50lakh… and incase you cancel the transaction. Plz note it is bank transfer and it’s is your income and you need to pay tax on it
Helpful?
Adv. Aditi Gupta
Delhi | 25+ Answers
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