What components includes 50 Lakhs for TDS Deduction on immovable property

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What components includes 50 Lakhs for TDS Deduction on immovable property

I purchased a flat worth 57.6 Lakhs includes GST and other charges (Electricity,Water, Corpus fund, DG backup, Club membership charges). In my sale agreement with builder, total consideration 51.8 Lakhs. Where Annexure-1(Sale consideration) is 17.8 Lakhs, Annexure-2(Cost of construction) is 29.9L Annexure-3(Other charges like Electricity, water,Club membership, DG backup, Corpus fund) is around 4 Lakh. Flat cost is 47.8L and 4 Lakhs other charges. Now please explain me do i need to deduct TDS 1% on each installment or not?

Profile photo of SIVA SANKAR Asked By: Anonymous 2 replies 1 helpful answers Last Updated: 5 months, 3 weeks ago
  • Profile photo of SIVA SANKARAnonymous

    I purchased a flat worth 57.6 Lakhs includes GST and other charges (Electricity,Water, Corpus fund, DG backup, Club membership charges). In my sale agreement with builder, total consideration 51.8 Lakhs. Where Annexure-1(Sale consideration) is 17.8 Lakhs, Annexure-2(Cost of construction) is 29.9L Annexure-3(Other charges like Electricity, water,Club membership, DG backup, Corpus fund) is around 4 Lakh. Flat cost is 47.8L and 4 Lakhs other charges. Now please explain me do i need to deduct TDS 1% on each installment or not?

  • Profile photo of Neha JoshiNeha Joshi
    Moderator

    Hello,

    As per section 194 IA TDS of 1 % needs to be deducted from the sale value of the property. This TDS needs to be calculated on the agreement value and GST should be excluded from such value. TDS is charged on the consideration for the transfer of immovable property and not on any other charges. Hence the stamp duty, registration charges and other charges are not a part of this value. However, if your agreement value includes all these charges then the TDS amount will be calculated on the entire amount.

    In the above case TDS of 1% should be charged on the value of Rs 47.8 L plus 4 L = Rs 51.8 L if this excludes GST. This is because the agreement the total charges are Rs 51.8 lakhs as specified by you.

    To know more on this please read our guide on this topic here – https://www.hrblock.in/guides/tds-on-sale-of-property/

    Hope this was useful to you.

  • Profile photo of AnkoshAnkosh
    Participant

    Dear Neha, when we say that GST component should be excluded from consideration value, can you please elaborate your opinion here. Is there any circular or case law which supports this ? There is a circular which clarifies that where GST component is indicated separately, TDS should be deducted on amount excluding GST. While this circular clarifies the ‘quantum’ on which TDs should be deducted, but it does not clarifies whether GST should be excluded even TDS applicability. I will be very grateful to you if you could clarify this doubt, as even I am facing a issue where flat value is below Rs 50 Lacs without GST, but it exceeds Rs 50 Lacs when GST is added

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