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TDS Filing – 7 Common Mistakes

TDS Filing
TDS Filing

TDS Filing in India is considered to be very tedious task. Trust me it is not. With the introduction of section 194IA w.e.f 1st June, 2013, now it is mandatory to deduct and deposit TDS for any property transaction over Rs 50 lakh. I shared the process of TDS filing in my post How to deduct TDS on Property Sale u/s 194IA.  It is also mandatory to deduct TDS u/s 195, in case of NRI Seller. You may check my post, How to deduct TDS on NRI u/s 195? for more details. With reference to my these posts on TDS filing, i receive lot of queries on error / mistake in TDS filing. Main reason is people are not getting proper information from banks, builders, agents, lawyers, CA’s etc. As a result almost 70% people end up wrong TDS filing. In this post, we will discuss 7 common mistakes which can be avoided while TDS filing.

Error Free TDS Filing

1. TDS Filing in Advance: This is most common misconception and confusion among the property buyers. Banks and Sub-Registrar offices are responsible for this confusion. Normally Sub-Registrar office demand TDS Payment challan at the time of registration. On the other hand, banks also demand the same before final disbursement. Today morning, on a call one of my client told that he buying a property from NRI Seller. Now TDS applicable is 20.66%. His contribution in property transaction is 20%, bank is demanding proof of his contribution before registration. Secondly, bank is not willing to deduct TDS from Home Loan. Its a catch 22 situation. As i clarified in my other posts, TDS is due only at the time of making payment (Installment / Lump Sum) as the case may be. Full and Final Payment is due at the time of property registration and in many cases, only agreement executed is Sale Deed. In these scenarios, TDS can be deducted only at the time of making payment. I asked one of the bank executive that you are suggesting my client to pay in advance but what if the deal is terminated by either parties. How will buyer get the refund of TDS paid in advance.

2. Confusion between Sec 194IA and Sec 195:  There is lot of mashup between these 2 sections. One of my reader who bought property from NRI, based on his lawyer & bank’s suggestion TDS filing was through challan 26QB & that too TDS of 20.66%. Let me again clarify that TDS of 1% u/s 194IA is applicable only in case of Resident Indian Seller. If the seller is NRI then TDS u/s 194IA is not applicable therefore buyer cannot use Challan 26QB for TDS filing. In case of NRI seller, TDS is deducted and deposited u/s 195 and challan for TDS payment is filed by the buyer after obtaining TAN. TAN is not required u/s 194IA. As i mentioned in point 1, if you are availing Home Loan and seller is NRI then you should discuss with your Home Loan provider on how to deduct and who will deduct the TDS. TDS is huge amount i.e. 20.66% almost equivalent to borrowers contribution in this case.

3. Multiple Buyer’s / Seller’s: Another confusion is on how to deduct TDS in case of multiple buyer’s and Seller’s. Most common query in case of Husband and Wife buyers is that can one party pay on behalf of other. To clarify, TDS is deducted in proportion of ownership in property of both buyers / sellers. A separate challan/s are required for each transaction. For example, in case of 2 buyers and 2 sellers, For TDS filing no of challans for each installment / lump sum payment is 4.

4. Date of Payment: Another confusion is regarding Date of Payment. Under the Negotiable Instruments Act, 1881 and as per legal interpretation by the Honorable Supreme Court of India, a cheque is an instrument negotiated by delivery. Which implies when the cheque is tendered / deposited, there is a presumption that payment would be realized in due course of time. Hence the date of cheque deposit / tender is considered to be the date of payment irrespective of the fact when it is actually presented for payment. In short, Date of cheque deposit / tender is considered as date of payment similar to cash payment. Here cheque is basically a payment instrument therefore this ruling is applicable for all payment instruments like Demand Draft / Banker’s Cheque etc. In Short, for TDS filing the date on which payment instrument is handed over to the seller is considered as Date of Payment.

5. TDS in case of Home Loan: Another common area of confusion, Banks don’t inform borrower to deduct TDS and insist on borrowers contribution proof. Banks don’t deduct TDS for disbursement from Home Loan. End result borrower either forget to deduct TDS or deduct complete amount from own contribution. It is not right way to deduct TDS. Best solution is that borrower should give it in writing to bank to deduct TDS. Bank can transfer TDS deducted from Home Loan disbursement to borrowers account. Borrower can complete formalities of TDS filing for each installment / disbursement and submit TDS certificate to Bank and the Seller. In case of NRI Seller, you can discuss regarding TDS filing in advance to avoid confusion at later stages.

6. Refund of TDS: Many sellers and even buyers claim refund of TDS u/s 194IA. In case of Resident Indian Seller, TDS deducted and deposited by buyer is non-refundable. TDS is deducted from seller’s contribution therefore buyer cannot claim refund. It can be only adjusted against capital gain by the seller. If the capital gain is nil then it can be carried forward as capital loss. In case of a NRI Seller, TDS deducted for TDS filing is 20.66% of gross consideration value whereas capital gain tax is normally much lesser amount. NRI’s can claim refund at the time of filing ITR.

7. Penalty for delay in deduction and / or deposit of TDS: Many buyers deposit TDS without including penalty for delay / deposit of TDS. It is always advisable to take professional help to calculate penalty in case of delay in either deduction or deposit of TDS.

All said and done, in case there is mistake or error in TDS filing. Buyer can get it corrected within 90 days of TDS filing, if the TDS payment was done through Bank. After 90 days, he can approach AO for any corrections. In case TDS filing was online and payment was through net banking then you can call helpline no of TDS-CPC to resolve the same. Helpline No’s of TDS – CPC are 1800 103 0344 or 0120 4814600.

Last but not the least, it is always advisable to include TDS details in Sale Agreement / Sale Deed along with break up of payment details. I do agree that TDS filing is one extra step but TDS filing is very simple and easy.

Copyright © Nitin Bhatia. All Rights Reserved.

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Abhishek
Abhishek
9 years ago

You are doing a wonderful job Nitin by helping us with all these intricacies, its really commendable. Thank you so much.

Now, I just bought a property and I gave a cheque (cheque date 07.03.2015) to seller on 12.03.2015 and it got cleared on 12.03.2015 (Got cleared in the same day as both our banks are the same; though I understand when it gets cleared is irrelevant). But what date should i show as the payment date?
07.03.2015
or
12.03.2015
NB: 1.The money receipt date is 12.03.2015.
2.I have already deposited the TDS mentioning the date of payment as 12.03.2015, do i need to change it now?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Abhishek

As i mentioned in my post that date of payment will be date on which payment instrument is handed over to seller. Therefore in your case payment date will be 12.03.2015.

Abhishek
Abhishek
9 years ago
Reply to  Nitin Bhatia

Thank you so much :)

sijo
sijo
8 years ago
Reply to  Abhishek

dear sir,i hav made mistake while tds e payment rather sellecting company i have sellected non company. how to correct it sir

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  sijo

You may contact CPC-TDS helpline for correction.

Amit Srivastava
Amit Srivastava
8 years ago
Reply to  Nitin Bhatia

Hi Nitin , I have got almost all my queries by reading your posts . In my case agreement does not says anything upon share % of mine and for my wife (co owner) . should i fill 02 forms with 50% -50% TDS amount Or cani also do it via a single form with 100% TDS amount . Appreciate your help .

Nitin Bhatia
Nitin Bhatia
8 years ago

If the proportion of ownership is not specified then it is considered to equal i.e. 50% each. You and your wife can file 2 challans for each installment assuming there is only 1 seller.

roshan
roshan
8 years ago
Reply to  Nitin Bhatia

Can you confirm if TDS is 1% on sale agreement or construction agreement. We have both of this separate. Value as per sale deed is 75 LK.Value as per construction is 2.5Cr. Registering the sale deed was april 15 2013 , Payment of sale deed amount was also before april 1 2013. Do we still need to deduct TDS ,since it was paid before June 1 2013.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  roshan

No. Any payment made before June 01, 2013 is not liable for TDS.

Aparna
Aparna
9 years ago

Hi, Firstly thanks very much for taking the time to maintain this website. Could you please clarify what happens in case where a DD is taken of the name of NRI property Seller say for e.g. on 23/03/2015, but registration date and also the date when the DD instrument will be personally handed over to the Seller will be ONLY in April say for e.g. April 15th – 1. Is the “payment date” with respect to Section 195, the original DD date 23/03/2015 or the date on which it was personally handed over to the Seller i.e. 15/04/2015. Also will the deadline for deposit for 20.66% TDS in this situation will be April 7th or May 7th? Pls kindly could you clarify?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Aparna

1. Payment date will be 15/04/2015
2. Last date to deposit TDS will be 7th May

Rajesh
Rajesh
9 years ago

Nitin,
I have booked a property and have paid 20% amount. In the scheme offered by builder, I have to make payment in 21 instalments spread over a period of three years. I and my wife are co-owners for the property. Builder had suggested us to deduct 1% TDS from the 20% amount that we paid him. We deducted the 1% amount (Rs. 10,000) and paid this amount online as per help document provided by builder. Now, only while entering the details on the TDS website we found only one name can be entered for TDS. I have filed TDS in my wife’s name (Rs. 10,000).
My question is,
1. To balance the TDS payment share, can I pay TDS in my name till my share of TDS reach Rs.10000 ?
2. Only after paying 5 instalments, Rs. 10,000 TDS value will be reached. Five instalments will take 10 months ? Will this be ok ?
Kindly suggest
regards
Rajesh Pai

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Rajesh

1. For each installment you need to file 2 separate TDS Challan i.e. one each for each buyer. There is an option to select multiple buyers in challan.
2. It is not the right way to file TDS challan. Request you to check following post

https://www.nitinbhatia.in/real-estate/how-to-deduct-tds-on-property-sale-us-194ia/

Abhishek
Abhishek
9 years ago

Hello Sir,

Please let me know if TDS will applicable in my case:

Details:

Unit Cost:
As per construction agreement: 3968628 Rs (Including Car Parking)
As per the agreement o sell: 736200 Rs

Other charges (As mentioned in Annexure 2 of construction agreement)
Bescom charges: 163600 Rs (Electricity Charges)
Generator Charges: 120000 Rs

If we add all these charges then also the total value will be 4988428 Rs.

So, the unit value of my apartment is below 50 lakhs, so do i need to pay the TDS ?

Kindly reply as early as possible because i have to solve this issue within this month.

Avishek Swain
Avishek Swain
9 years ago

Hi Nitin,

Thanks for all the details you have added here really helps buyers like us to take the correct steps.

I have got an intimation from the Income Tax government with Interest and Penalty of Rs 200 per day for the TDS filed which was delayed by 52 days as I was not aware. As you mentioned earlier it has very less chances to appeal and get that waived. Wanted to know how to pay this fine as per my understanding I cannot pay that fine through 26QB as in that I need to update the Amount paid date, TDS deducted date’s etc whereas in this case it is just interest and penalty on the old TDS paid for the first installment. Kindly advice.

Kind Regards,
Avishek Swain

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Avishek Swain

You have to file challan no 280, Type of payment 400. Insert interest penalty in “interest” and late fee penalty in “others” column.

Raghav
Raghav
9 years ago

Hi Mr. Nitin,

I have following query regarding the 1% TDS invloving multiple sellers and buyers
1) The Seller are Husband and Wife (wife is co-owner) and Buyer is myself and my wife (I am co-owner)
2) The payment has to be made against One Seller only (Husband)
3)
In the above case, How many Form no: 26 QB should be filled online
(three or four) if Immovable Property is purchased by two buyers from
two sellers i.e. one sale deed / agreement is in the name of two buyers
from two sellers,
4)
In case of Four Form no: 26 QB to be filled (2 Buyers against two
sellers), Should TDS be paid 25 % wise e.g., if property of Rs 60 lakhs
is purchased then should TDS be 25%wise i.e. four Form no 26 QB should
be filled & TDS be paid 25%wise? Similarly in case of three forms
(Two buyers against one Seller, since the entire payment is to be made
against one seller only) , should TDS be paid 50% wise e.g .5% TDS with
my PAN number and .5% TDS with my wife’s PAN number.

Regards
Raghav

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Raghav

For any calculations/personalized consultation, you may check services offered section on this site

Venil
Venil
8 years ago

Dear Nitinbhai,

Can I not make the TDS deduction on behalf of the bank ??
What to do in case the bank has not done any TDS deduction and done the disbursement ??

Will there be a problem ?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Venil

TDS is buyer’s responsibility.

Anthony
Anthony
8 years ago

Hi Mr. Nitin,I have following query regarding the 1% TDS invloving single sellers and 2 buyers
1) The Seller is one and Buyer is myself and my wife (I am co-owner)
2) in the above case, How many Form no: 26 QB should be filled online
(2 or 3) ???
3)If agreement value is for e.g 60lacs, so while filling form for 2 buyers each, shud i mention agreement value 60lac and tds 0.5% OR shud i mention agreement value 30lac and tds 1% ….

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Anthony

2. Two challans
3. 60 lacs

Amit Srivastava
Amit Srivastava
8 years ago
Reply to  Nitin Bhatia

Hi Nitin,

Thanks for your valuable replies . I have got somewhat clear clarity now by just reading your replies .

In my case i have purchased a flat . My wife is a co owner . She is a
house wife . Only I am paying the cost to builder . No ownership % is mentioned in agreement . I understood that I need to fill 02 separate form 26QB in our case . Demand is for installment payment of 100/- .
TDS to be paid .5 +.5 by both of us separately . However when I am
putting the values in 26QB , it says “wrong TDS amount” since portal is
calculating at 1% of installment .

Total Amount credited – 100
TDS rate – 1%
Basic TDS amount – I mentioned 0.5 and getting error prompt
after that as stated above .

What should I do ? Should i put TDS rate as 0.5% instead 1% ?

Nitin Bhatia
Nitin Bhatia
8 years ago

In the section “Whether more than one Transferee/Buyer”, you have to
select YES. Secondly amount credited will be Rs 50 for each buyer.

Nirmal Ramawat
Nirmal Ramawat
8 years ago

Hi Mr. Nitin,
while filling the 26QB I have made mistake in mentioning the name of Transfree & transferor and hence the TDS deposited was wrongly credited in the name of Buyer.Please guide me how to correct the same so that TDS Certificates can be issued to Seller

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Nirmal Ramawat

You may approach CPC – TDS for correction.

Deepak Kumar Suri
Deepak Kumar Suri
8 years ago

Dear Mr. Bhatia,

I have bought one flat and inadvertently paid 1% TDS using demand payment link on tin website. Now after 2 months too, neither 26AS is reflecting the transaction in Column”F”, nor 16B is getting generated. I have written almost 60 emails provided TDSCPC with all details , sought solution. But so far,their answer ” wait for some time” has not changed till today. Issue is I am a common man , paid full amount to Builder from home loan, paid 1% TDS to govt. in right head but wrong type(demand payment) even after this builder is not giving me possession for want of 16B certificate from me. Pity is, I am paying rent, paying EMI to bank interest component alone is costing me INR1500 per day. I met AO but they seems to have no authority/access to modify anything regarding 194IA and wrote to IT commissioner–but of no help so far. Could you please inform :

1. Is any CA or any other government official can help solve this immediately so that I get my home from builder.

2. Do I pay again the same amount which Rs 75000. Will I get refund of earlier paid TDS.

3.Could help or advise what to do at the moment.

Many thanks in advance for your kind useful help,reply, co-operation or advise.

Kind regards,

Deepak Suri

9833876664

Nitin Bhatia
Nitin Bhatia
8 years ago

You may check with CPC – TDS to get it corrected.

Swapnil Bagul
Swapnil Bagul
8 years ago

I bought home with my mother but I filled TDS as alone (with my pan no ) what can I do now to correct this

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Swapnil Bagul

You may contact CPC-TDS to correct the same.

mohinder goel
mohinder goel
8 years ago

i have made the 26 qb for tds 7552/- but online deposit the amount 9552/- (2015-16 ay). can i deduct extra payment in next instalment which is due on 25/09/2015 same amount 7552/-

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  mohinder goel

You may claim refund from IT department.

Ankit
Ankit
8 years ago

hi I have made the mistake while entering date

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ankit

You may check with CPC-TDS for correction.

mohit
mohit
8 years ago

Hi Nitin , I have purchased under construction property costing 60 Lakh ,Main applicant me and co-applicant my brother ,All the amount till now has been paid by me ,even home loan is under my name only .In this case does my brother also need to deduct TDS ?
if Yes can we divide the installments in such a way that both shares equals proportion lets say total amount to be paid in 8 installments ,first 4 installment i will pay the TDS and rest 4 he will pay the TDS.

Thanks & Regards
Mohit

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  mohit

Your brother will also deduct and deposit TDS. Both buyers should deduct and deposit TDS against each installment in proportion of ownership in property.

Sreejith Nair
Sreejith Nair
8 years ago

I have paid the complete amount to the builder and did not know about tds kindly request you advice what is my next course of action

_ Ajay _
_ Ajay _
8 years ago

Hi Nitin,

Registration date for my property is 24/Mar/2015.

Then financial year to be filled in online form 26 qb should be FY14-15 and AY would be 15-16..

please confirm whether above is correct.

OR as i am paying income tax now in november 15, then it would be FY15-16 and AY 16-17..?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  _ Ajay _

FY 14-15

Nitin Bhatia
Nitin Bhatia
8 years ago

It is not explained properly on the portal. If this is the case then IT portal should provide only one option of FY 2015-16 whereas option of all previous FY is available.

The tax is paid for the year in which it was due. For my IT, if the due as for FY 13-14 then i will mention the same though i am paying in FY 15-16.

_ Ajay _
_ Ajay _
8 years ago
Reply to  Nitin Bhatia

Thank you NItin! I love your website.. it helps in a lot of matters.. Keep up your good work!

x
x
8 years ago

My registration date for the property is on 28/12/2015.I Can only file 26QB on
or after the above date..right? Advance Filing is not possible at the site.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  x

Date of registration has no correlation with TDS. TDS is due at the time of making payment. Assuming you will make full payment on date of registration then your understanding is correct.

BS MAITI
BS MAITI
8 years ago

Hi Nitin !
I have purchased a property costing 54Lakh for which Registration was done on 22nd May 2013. I understand that the TDS of 1% is applicable w.e.f from 01st June 2013. In the
meantime as per broker’s advise I also paid TDS of 1% as I was the buyer and deducted the amount from the seller. In such case if I want to get the return of the TDS amount then what I need to do as seller is asking for the amount that he is not supposed to pay as TDS? Please advise if there is any way.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  BS MAITI

I doubt now you will get refund. Still you can approach your AO and submit an application for refund of TDS deposited explaining the reasons for same.

D N Dave
D N Dave
8 years ago

Hi Mr. Nitin,

I have purchased a under construction property jointly with my wife in mumbai having agreement value of Rs 90 lakhs. I have already paid 20% of the same to the builder after deducting relevant TDS of 1% on it. But while paying TDS i paid on my single name only. It is a problem for us?

Secondly, Now in Dec 2015 we have entered into a agreement with the builder for the property. Here my question is, am I liable to deduct and pay the TDS on the balance amount of the agreement ie 80% of argeement value by 7th January 2015?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  D N Dave

1. As i mentioned in my post, TDS should be deducted and deposited in proportion of ownership in property.
2. I am assuming you paid balance 80% at the time of agreement in Dec’15. In this case, last date of TDS deposit without penalty is today i.e. 7th Jan, 2016.

RS
RS
8 years ago

What happens if buyer is not aware of this and didn’t deduct the Tax and make full payment to builder. Can buyer request builder to deposit the Tax on his behalf?

Or buyer will ask for refund from builder to the amount equivalent to TDS and then deposit the same?

What are buyer options in this scenario?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  RS

You may ask for refund from builder and deposit the TDS.

vswami
vswami
8 years ago

hello sir

This is about an under construction apartment. Agreement much before june 1 2013. Consideration (all inclusive) as originally agreed was Rs 43 lakhs. Out of which only one instalment, say 3 lakhs was paid after june 1 2013,

Construction now completed and sale deed to be registered. For various reasons , there has been an escalation; final price comes to Rs. 53 lakhs. Balance payable works out to Rs 7 lakhs.

Is TDS called for – on Rs 10 lakhs (3 + 7) or only on 7 lakhs ?

Any problem at the time of registration (as TDS iwill not be 1 % of Rs 53 lakhs) ?

Thanks in anticipation of an early reply.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  vswami

TDS is applicable on all payments made on or after 1st June, 2013 therefore it is applicable on 13 lacs. Sub-registrar should not be concerned about the TDS. It is buyers responsibility.

vswami
vswami
8 years ago
Reply to  Nitin Bhatia

Thanks for the prompt response.
i have passed it on to the concerned person.
As a matter of courtesy, shall get back to you after i have heard from him. Also , incidentally, shall share with you some of the feedback material with me, which may be of common interest, and found useful.

Sunil Kumar
Sunil Kumar
8 years ago

Dear Mr Bhatia, thank you for sharing such useful information. My issue is related to Point 5. The bank has disbursed the full amount without deducting the TDS. Now how should I go about filing the TDS. Should I request the builder to refund ? Though practically it is impossible to get anything back from the builders. Is there any other option with me ?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Sunil Kumar

Only option is to get refund from builder.

Yasser
Yasser
8 years ago

My bank accepted to deduct the tds before ma king final payment to the builder, but bank is asking on whose favor this tds amount has to be made by cheque or dd payment as bank is not accepting it to transfer directly on my name so that I can pay the tds.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Yasser

Bank has to transfer the amount in your bank account and then you can pay TDS. This is standard process. You can give written assurance to bank that you will produce TDS challan as a proof of same.

Yasser
Yasser
8 years ago

Thank you sir..
I am trapped into confusion.. Please help me….
Guidance value is 60lakhs and I have bought it for 45lakhs, so registration is going to happen for 60lakhs and in draft copy of sale deed it’s mentioned as 45 lakhs as consideration value.
Now do I need deduct 1% tds or not? What value is considered for paying 1% tds when consideration value is less than guidance value? Builder says it’s not applicable as he considering 45lakhs consideration value.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Yasser

Builder is right. TDS is applicable on consideration value that is less than 50L. Therefore, in my opinion TDS is not applicable.

Nikhil
Nikhil
8 years ago

In my case we have 2 buyers and 1 seller. I did not realize the proportion of share of payment as my mother is paying though my name is added to property as well. So I generated 26B form with wrong figures. I realized my mistake so I did not proceed for TDS via that acknowledge number.
1. Do I need to something about wrong 26B form generated?. I can easily fill two correct 26B now.
2. My builder has asked me deduct TDS on whole demand which includes service tax as well. Is this ok?. The is the first demand.
3. What Total Value of Consideration I should put in from when I am paying for BSP + Parking + PLC + Club Membership + EDC/IDC + IFMS + Service Tax.
4. The payment should be done through Joint Bank Account only as I am also property owner?
5. Just to confirm it is advisable to show proportion of share as 50:50 for TDS purposes in my situation.

Appreciate Nitin for your help to all people like me.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Nikhil

1. If the payment is not made then you can ignore the existing form and initiate fresh filing
2. It depends how builder is accounting the money in his books. You should go by builder’s word
3. You may check with builder as i shared in point no 2. Normally, BSP+parking is taken as consideration value for TDS purpose.
4. Yes. it is preferred
5. Yes if it is not mentioned in your agreement with the builder.

Deepak
Deepak
8 years ago

Sir, Actually I had paid 89,000 as TDS to buy a property worth 89 Lakhs. After paying the TDS, due to some legal issue, I could not buy that property and sale deed could not be completed. How will I get back the TDS amount back ? Please help me out here

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Deepak

TDS is due at the time of making payment. You cannot pay advance TDS. You may approach your AO as i suggested in my post.

G M Arora
G M Arora
8 years ago

Dear Sir,

I am seller of the flat for which consideration value is about Rs 75 L.

Background:
I had purchased flat in 2009 from the builder. In the sale agreement my & my wife names are there as the purchaser without any reference of proportionate share of each. All the payments for purchase of flat were made by me & NIL by my wife. My name is the Ist name in the agreement, whereas her name is 2nd. My wife is homemaker. She do not have any income and therefore she is non taxpayer but have PAN card. In my all IT returns (last 7 years) in ITR 2, I have mentioned my share as 100 % & and my wife share as 0 % for rental income. This is in view that she is treated as co-owner of the property and I am the owner.

Query:
In view of above facts, while selling the said flat, the purchaser has query for making deposit TDS.
1) TDS is is to be deposited to the extent of 100 % in Ist name ?
2) or TDS is to be deposited in proportion of 50 % to the owner and co-owner

Please clarify.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  G M Arora

The rental income is divided in proportion of ownership in the property but in your case clubbing of income provisions apply therefore so far so good. With ref to TDS, it will be deducted in proportion of ownership in the property therefore option 2 is applicable in your case.

G M Arora
G M Arora
8 years ago

The purchaser of the flat has deposited TDS against the wrong PAN card no. Now how to get it corrected.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  G M Arora

He has to approach his AO for correction.

Keerthi
Keerthi
8 years ago

Dear Nitin,

I have got an intimation from Income tax u/s 200A, and it says default on late filing of Rs 4898 which is exactly the TDS amount which I have already paid in July 2014 on purchase of property. Could you please explain what TDS filing requirement are they talking about and how come the default as per them is exactly the TDS amount which has been paid by me already.

Also could you please tell me the due date of filing such TDS return if any?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Keerthi

It is Penalty u/s 234E. Please check my following post for more details
https://www.nitinbhatia.in/real-estate/how-to-deduct-tds-on-property-sale-us-194ia/

The due date of filing TDS return is 7th of next month in which the payment is made. For example, the due date for TDS return is 7th April, 2016 for any payment made in the month of Mar’16 for which the TDS is due.

Kritika Jain
Kritika Jain
8 years ago

In case of joint property purchase, if the husband pays the entire EMI and also deposits the entire TDS, can the IT Department hold the wife as a defaulter?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Kritika Jain

Yes

Arun Nair
Arun Nair
8 years ago

I have purchased a property (2 BHK Flat) worth 57 lacs. Done registration on 23rd march 2015. Given 17 lacs at the time of registration and remaining 40 lacs as home loan. The home loan amount is transferred to the owner on 26th may 2015. I was unaware of the 1% tax and have not deducted the same during the payment. When i got a letter regarding the same from Income tax department i contacted my owner again and told him give me the amount which is any way will be adjusted in his capital gain. he told me that he bought another property so that he don’t require to pay any tax. So if i am paying the tax in any means the previous owner can claim the same? or if there is any way out so that i can be exempted from paying this tax?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Arun Nair

There is no other way. You can seek refund from selller and pay the TDS. Even if he has bought any other property, the TDS will be applicable as the TDS can be adjusted only against the capital gain of the property sold by him.

Arun Nair
Arun Nair
8 years ago
Reply to  Nitin Bhatia

Thanks for the feed back.

If I am correctly understanding; the seller of my flat bought a new flat, So the TDS he needs to be pay on the new property can be adjusted with the amount I am paying. Please clarify.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Arun Nair

As i explained, it is not correct. A TDS has to be deducted and deposited even if he invested in any other property.

Arun Nair
Arun Nair
8 years ago
Reply to  Nitin Bhatia

Thanks a lot Nitin for the valuable information…

Ateet
Ateet
8 years ago

Hello Nitin,
This is regarding the intimation email which my wife got from Tax Dept.
I have purchased property in Oct 2014 worth RS 79 lacs on the name of me and my wife. So we are co-owners in the said property.
The Builder already made the full payment of 1 % TDS (79000 k) on my name/PAN only instead of making 50-50% as we are co-owners here.

I have two questions to ask here:
1. Can I reply them with challan receipt /form 16B (which is on my PAN) as proof of 1% TDS is already paid by co-owner?
2. Do i need to go for 26 QB correction and ask for 50% refund (which will be for my PAN) and fill the separate 26 QB on my wife’s name? But in 2nd option I will have to pay penalty and interest which will be huge now.

Please advise me what actions i need to take on this to avoid paying extra money.

Help appreciated!

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ateet

1. TDS is not deposited correctly by the builder. It is deducted and deposited in proportion of ownership in property. Therefore, your wife should have deducted and deposited TDS.
2. That’s correct

Prabha Biswas
Prabha Biswas
8 years ago
Reply to  Ateet

Mr.Ateet ,

Can you let me know what you finally did about this situation? Did you have to file a 26QB in ur wife’s name or Did the tdscpc guys say to ignore this intimation to ur wife as TDS was already paid in full under your PAN? I really am stuck in similar situation and cannot understand what is the next step.Did u have to pay interest and penalty even though TDS was filed on time by your builder ?

Ateet
Ateet
8 years ago
Reply to  Prabha Biswas

Hi Prabhas – I did make calls to their Customer Care thrice (just to make sure) and they said you can ignore this as one owner already paid TDS in full. So I did replied to Intimation they sent with all the proofs like – 26QB, 16B and screenshot of Traces entry .. So I can have the proof of communications. Though I haven’t got any reply from them since last 30 day so I assume this should be fine with them.
Hope this helps you!.

Shining_Ruby
Shining_Ruby
8 years ago

hello sir,

I have purchased a resale flat for 62 Lac on APR 2014 and I was not aware of 1% TDS need to be paid. I have made a full payment of 14 Lac by cheque and 48 Lac by bank loan without deducting any TDS.

Now I have received mail form TDS saying “26QB Statement not yet filed for Purchase of Property during FY 2014-15”

I have contacted seller to give me the TDS amount and i am ready to pay late fees…but seller is not ready to pay..what should be done??

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Shining_Ruby

Only option is to convince seller. You can deposit without deduction.

Ram
Ram
8 years ago

Dear Mr. Nitin,
Myself and my wife are joint buyers for a flat. When making TDS payments, we have mentioned the full installment amount in our Form 26QBs and deducted only 0.5% as TDS from the entire amount. We both got demand notices saying there is shortfall in payment of 0.5% of installment payment. Can I correct this online through TRACES website by updating the transaction amount to 50% of the installment amount for each of us? Thanks a lot for the guidance.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ram
Nitin Bhatia
Nitin Bhatia
8 years ago

You need digital signature to make any changes online else the process is offline only and you need AO approval for corrections.

Ram
Ram
8 years ago
Reply to  Nitin Bhatia

Dear Mr. Nitin, Thanks so much for your guidance.

Mitesh Chauhan
Mitesh Chauhan
8 years ago

Dear Mr. Nitin,

Thanks for the above calculation. In my case i purchased a property last year in May. My mother and me both are the owners of the property. I took a loan from HDFC home loan however no one from HDFC advised me to pay the 1% TDS on property.
Last week being year end i received a mail from TAX Reconciliation department to pay the tax that is when we got to know that we need to do this process as well. In-fact the seller too was unaware.
Now i want to know whose at fault since we didn’t know about the process, neither the Registrar office asked us for this payment and nor the bank informed us.
Also there will be penalty charges which ultimately is a loss for me.
Your guidance will be really appreciated.
Regards,
Mitesh

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Mitesh Chauhan

Unfortunately TDS is the sole responsibility of a buyer and a buyer cannot put onus on bank or sub registrar for the same. You can request seller to refund 1% TDS and then you can pay the same along with applicable penalties.

jovicud
jovicud
8 years ago

Dear Mr Nitin,
Thanks for your valuable post and various feedback ,i’m in a scoop i had purchased property in 2013 for 65 lakhs but i forgot to deduct tds ,now i have received notice for not paying tax,i contacted the seller but he has refused to cooperate as he has already filed tax and paid capital gain ,what should i do,is there any legal route i can take or there’s no option for me?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  jovicud

There is no other option but to request and convince seller.

NLGeek
NLGeek
8 years ago

Dear Sir,

Thank you for your informative blog, is it useful to common man.

My question is about a transaction that took place in 2013, buyer did not know about TDS requirement and seller used the proceeds immediately to purchase another property, and thus has no capital gains tax to pay. Now the buyer has received notice in 2016 (after 2.5 years) to pay TDS. Please can you advise regarding the following:
1) Can the seller pay TDS directly on behalf of the buyer?
2) Its been 2.5 years since the transaction, how will the seller recover the TDS?
3) Can this be resolved by presenting the matter to the AO?

Thanks in advance,
Minee

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  NLGeek

1. No
2. TDS is buyer’s responsibility not a seller’s responsibility
3. No

vivek Bhatkulkar
vivek Bhatkulkar
8 years ago

Dear Mr. Nitin

Thanks for a nice article. Hope you can help me with issue I am facing

We deducted TDS @ 20.6% using challan 26QB from a NRI seller. Total consideration being 86 lakhs TDS ran into 17 lakh figure. Now Form 16B is showing only Rs. 86000 as credit. Is there any way I can either get the whole amount reflected in 16B or correct the challan to show only 1% tax and get rest refunded?

Please let me know, I would be happy to have a word with you on phone if that is suitable.

Abhishek Dua
Abhishek Dua
8 years ago

Have same query..

Nitin Bhatia
Nitin Bhatia
8 years ago

In case of NRI seller, challan 281 is filed. Challan 26QB is only for resident Indian seller.

vivek Bhatkulkar
vivek Bhatkulkar
8 years ago
Reply to  Nitin Bhatia

Sir Thanks for your reply. The mistake is already happened. Only 1%. Out of 20.6% is reflecting on 26AS. Is there any way to recover money that has got stuck?

Nitin Bhatia
Nitin Bhatia
8 years ago

You may approach your AO for refund and cancellation of challan 26QB

Manish Kumar
Manish Kumar
8 years ago

Dear Vivek,

I have also done the same mistake of using Form 26QB for deducting TDS of an NRI. Can you please suggest if you have found certain solution or way forward of correcting the mistake. Your help will be highly appreciated, My email ID is mk.manishkr79@gmail.com. Also you can leave your contact number in the mail and I will call you. Looking forward for your kind support.

Manish

Sachin Agrawal
Sachin Agrawal
8 years ago

Hello Nitin Sir, had a query regarding TDS for 2 sellers…The selling party is taking all the payments from myself in the name of 1st name only and have asked bank also to issue payment only in 1 Name. They are saying although its in joint name, all payments at time when they bought were made by 1st name seller only and hence want all the payments in 1 Name.

My query is that shall TDS be paid for both the sellers (half amount of 1% TDS each) by filling two 26QB forms, though payment is made only to 1 seller.

Please let me know about this.
Thanks & Regards,
Sachin

Sachin Agrawal
Sachin Agrawal
8 years ago

Hello Nitin Sir, had a query regarding TDS for 2 sellers…The selling party is taking all the payments from myself in the name of 1st name only and have asked bank also to issue payment only in 1 Name. They are saying although its in joint name, all payments at time when they bought were made by 1st name seller only and hence want all the payments in 1 Name.

My query is that shall TDS be paid for both the sellers (half amount of 1% TDS each) by filling two 26QB forms, though payment is made only to 1 seller.

Please let me know about this.

Thanks & Regards,,
Sachin

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Sachin Agrawal

You have not mentioned the reason why all payments should be made to 1 seller. You may be trapped in legal hassle in future. Tomorrow 2nd owner of property can claim his/her stake in property even if she is wife. Normally i observed that such arrangements are proposed when some dispute is going on between husband and wife. TDS is secondary, first you should resolve payment issue.

SUNIL DSOUZA
SUNIL DSOUZA
8 years ago

Dear Nitin Sir,

Myself and my wife have purchased a property with an agreement value 62,50,000/- . We have paid the initial booking amount of INR 211000/- on 25/10/2015 without deducting any TDS. the date updated in the agreement is 16/01/2016 while we have registered the property on 10/02/2016, the booking amount is mentioned in the . Till date our loan sanctioning is under process and complete payment is still due to be paid to the builder. Builder has agreed to refund the TDS paid by us. We will be paying the balance principal amount in next month via Loan ( directly credited to builders a/c by the bank) and balance amount via cheque from our end.

Have following questions in mind

1 Do i have to pay TDS from 16/01/2016 ( dt of Agreement ) or from 10/02/2016 ( dt of Registration) or from the time when we will pay the complete amount ( ie in May 2016).

2 Do i have to pay TDS for the booking amount paid of INR 211000/- ( this amount is mentioned in the agreement) separately which is given in October-2015. If yes, please advise if late payment will be applicable. If yes please can you confirm me the late payment fees which will have to be paid.

3 Will i have to make multiple challans for every payment we make to the builder ( ie 1 for Booking amount, 1 for Loan Amount, 1 for Balance amount) or only total value TDS challan is acceptable.

4 When will Interest calculation (1% per month) and Late payment ( INR 200/- per day) apply in my case.

5 Is there a Max cap of late payment Interest and Late Payment fees.

Thanks & Regards

Sunil Dsouza

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  SUNIL DSOUZA

1. TDS is due with each installment therefore it is due from 1st installment i.e. 25/10/2015
2. Yes. Calculation of TDS amount is paid service but you can go through my post on how to calculate
3. Yes. It also depend on no of buyer and no of seller
4. From date of TDS payment/deduction in case of delay
5. There is no max cap on interest but fees cannot exceed TDS amount.

optimus1509
optimus1509
8 years ago

Does TDS deduction details have to be mentioned in the sale deed?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  optimus1509

Preferably you should mention.

Yatin Kadam
Yatin Kadam
8 years ago

Hello Mr. Bhatia,

Exact article which i was looking for…..almost all my quires has been answered.

However, i would like to have a clear view about my specific case.

I am an NRI and sold my property to resident indian.
My purchase agreement price was 29 lac and my sale agreement price is 66 lakh.
Property is sold after 3 years.
We had agreement for Sale on 25th March 2016 after receipt of advance of 6.6 lakh (on 16th Feb) and my closure of home loan of 13.72 lac ( 03 rd April) through buyers home loan.
Buyer have not deducted TDS for earlier payment.
Now we have to executed final sales deed after paying balance amount of agreement minus TDS amount for entire sales deed amount of 66lakh at rate of 20.66%.

My questions
1. Banker cheque for final payment will be dated 30th April 2016, can buyer deduct TDS for entire amount in financial year 2015-2016, reason i can claim my returns and do not have to wait for entire year to end in case buyer pays it in 2016-2017 ?
2. Will it create any problem to buyer in case he shows TDS paid in advance?
3. Will there be any penalty or late payment if we proceed as discussed in point 1?
4. Alternatively, Can i have sales deed executed prior to TDS deduction?
5. What all challan/forms buyer has to file while paying TDS ?
6. Lastly, what all challans he will handover to me for filing my returns and how long it take for refund of TDS?

Will appreciate if your could HELP me answer all the above quires.

Expecting your reply

Regards,
Yatin Kadam.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Yatin Kadam

1. No. TDS is deducted in FY 2016-17 therefore you cannot show retrospective TDS deduction.
2. Yes. TDS is due only at the time of making payment. Advance TDS payment is not allowed
3. It depends on IT department
4. It doesn’t make difference
5. challan no 281
6. He will handover TDS certificate i.e. form 16A. It may take upto 2-3 weeks from the date of TDS payment.

Arjun
Arjun
8 years ago

Dear Mr. Nitin,
Last month, I had paid TDS of 1% for payment for a property. payment was 9,27,728 so TDS comes to 9,277.28 but as the system was not allowing fraction ,I paid 9,277.00. Now I got intimation that there’s Default of payment of Rs 0.28. So what shall I do, correction of 26QB or payment of Rs 180 penalty ?
& for future TDS payments, is it ok if I pay Rs 1 extra ?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Arjun

The fraction is always rounded off to next absolute value i.e. TDS of Rs 9277.28 means you should have paid Rs 9278. You should pay penalty and take care of this point in future.

Arjun
Arjun
8 years ago
Reply to  Nitin Bhatia

Thank you Nitin Sir.

Ravi Gupta
Ravi Gupta
8 years ago

I am buying a newly built and not yet registered apartment from a NRI seller where assignment agreement will be signed between builder and me with seller as the confirming party. Once assignment is done , Builder will register this property in my name without any mention of seller in registered document. Given this is a case of assignment from NRI but registration by Indian builder , Should I withhold 1% of sale value as TDS u/s194A or Should I withhold TDS at 20.66% (LTCG u/s 195 for NRI seller)

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ravi Gupta

For payment made to NRI Seller, TDS will be 20.60%.

Pilot77in
Pilot77in
8 years ago

Hi Nitin,
My wife pays for the property where she added me as a co owner. As the flat is still under construction and not registered, is it possible to get myself removed from the agreement making her the single owner? In which case then form 26 QB will need only her filing? She has already filled for a few installments indicating more than one buyer as yes…..let me know. Thanks, Praveen

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Pilot77in

It is possible. You may approach builder for the same.

abhishek kumar
abhishek kumar
8 years ago

Dear Nitin Sir,
I bought a property on may 2015 and made the required TDS payment of 1% i.e. 71000/- in my case,but while filing 26QB form i failed to notice the default dates of 1 June 2013 for date of payment and date of tax deduction and generated the challan for assessment year 2016-2017 with all correct information except for above mentioned fields.Transaction date in challan is 2nd june 2015.Registration of my flat along with loan disbursement was done by mid july 2015.Now i have received a default notice 200A with a penalty of 71000 + 26000=97k with year 2013.Please let me know if i have to pay the penalty in any case or it can be resolved with just filing a correction and without paying penalty amt in question.
Please guide me.
Many thanks in advance for your help.Abhishek Kumar

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  abhishek kumar

You may approach your AO to get it corrected.

Rahul
Rahul
8 years ago

Hi Nitin,
I had made a TDS payment on a property I purchased 2 years back. The builder claims he has not received the credit for it. I have shared the TDS certificate but insists me to follow with Tax department. Kindly let me how to go about the process?
Thanks,
Rahul

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Rahul

If you have submitted TDS certificate with builder and PAN quoted is correct then your responsibility is over. Secondly, there is NO tax credit issued for TDS u/s 194IA. It can be adjusted against capital gain.

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