TDS on purchase of property

TDS on purchase of property

I have purchased a flat of approx Rs 93,98,900 and its under construction property and it will be delivered in june 2020.
Below are my payment installment details:
1st installment made to seller(28/08/18)- 89,286 (No TDS deducted)
2nd installment made to seller(07/09/18)- 7,38,839(No TDS decucted)
3rd installment made to seller(26/10/18)- 57,96,875 (TDS deducted of Rs 66250 for all three installments on 26/10/18).
Note: Date on Agreement of Sale is 17/09/2018 and Date of booking is 29/08/2018.

I forgot to pay TDS to government for all the installments, now I have to submit the TDS to government by today(31/12/2018). Please help in the same.

1) Do I need to file 3 separate 26QB form for each payment date(28/08/18, 07/09/18 and 26/10/18).
2) What will be the date of tax deduction in each form, is it 26/10/18?
3) Do I need to pay Rs. 200 per day fee also or only 1% interest.
4) I have purchased this property along with my wife as joint owner, then do i need to file 6 form (3 for myself and 3 for my wife).
5) What should I mention on in form "Date of Agreement of Sale/Booking" is 17/09/2018 or 29/08/2018

Asked 6 years ago in Income Tax

In case the payment is made in instalments, then TDS needs to be deducted at the time of making each payment. This TDS, deducted each time while paying the instalment, is to be deposited with the department by way of return cum challan (Form 26QB) within seven days of the following month of making the payment. Failing to do so can, apart from the dues and late filing interest, attract a penalty under Section 271H of up to Rs 1 lakh.

For those who have received a notice, the immediate corrective step to avoid paying a penalty is to pay the TDS along with the applicable interest and late filing fee.

Consequences of not deduction of TDS

Interest for TDS not deducted
Interest at the rate of 1% per month or part thereof, for the period from the date on which TDS is deductible/collectible to the date on which TDS/TCS is actually deducted/collected.

Interest for TDS deducted but not paid
Interest at the rate of 1.5% per month or part thereof, for the period from the date on which TDS is actually deducted/collected to the date on which such TDS/TCS is actually paid.

Calendar month is considered in calculating interest therefore if you delay payment by one day, you have to pay interest for two months. For example, if TDS is deducted in month of July and deposited on 8th of August then you have to pay interest for 2 month i.e. July and August. Total interest payable shall be 3%.

Penalty for late filing of Form 26QB
Along with the interest penalty is also payable at the rate of Rs. 200 per day for which the default continues. The penalty amount cannot exceed the amount of TDS to be deducted. And if the default continues for a period of more than one year then additional penalty of Rs. 10,000 to 1,00,000 is to be paid under section 271H. Amount of such penalty is to be calculated by the Assessing officer.

Buyers should also remember to issue Form 16B. “It is generated via TRACES and the seller may not be able to take tax credit for TDS deducted in case of non-filing or latefiling of Form 26QB,” said Gupta. Penalties remain the same for failing to do so.

Ajit Kumar Jain

CA, Mumbai

26 Answers

Talk to Ajit Kumar Jain

Technically you were required to deduct TDS on every installment and deposit it with government within 30 days of such payment. Since you have not done that you need to pay 1% interest you are not required to pay 200 late fee as of now.

Tax deduction date should be the date on which you actually deducted TDS i.e. 26-10-18 and since you have deducted TDS on 26.10.18 but not deposited with government till now you will also be required to pay 1.5% interest on same for 2 months.

Yes both of you need to file TDS of half amount if the ratio is 50:50.

I think date of booking would be more appropriate.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo

CA, Jaipur

4292 Answers

101 Consultations

Talk to Naman Maloo

TDS needs to be deposited along with interest & late filing fees.

1) Yes 3 separate form needs to be filled for each payment date..

2) You need to do both.

3) Yes file separate forms with TDS in ratio of ownership.

4) Date of sale needs to be mentioned.

Chirag Maru

CA, Raipur

210 Answers

Talk to Chirag Maru

Hi,

Hope you are doing well !!

1. Yes, you need to file separate 26QB form for each payment date(28/08/18, 07/09/18 and 26/10/18).

2. Yes, it is 26/10/2018.

3. You need to pay only 1% interest.

4. Yes, you need to file 6 form (3 for yourself and 3 for your wife).

5. Date of booking.

Thanks & Regards,

Payal Chhajed

CA, Mumbai

5188 Answers

298 Consultations

Talk to Payal Chhajed

Thanks everyone for your time.
I have one more question, Do I need to mention amount with include GST or without GST.
I think Total Value of Consideration (Property Value)*- Must include GST (93,98,900)
and for installment "Total Amount Paid/Credited*" I have to mention without GST (payable to the Transferor/Seller on which tax will be deducted).
For example: In 1st installment on 29-Aug-2018, I have paid to seller is Rs. 1,00,000(89,286 + 10,714(GST)), So I have to mention only 89,286.
Please correct me If i am wrong.

Asked 6 years ago

As per CBDT circular no.23/2017 dtd. 19th July 2017 TDS to be deducted on the amount payable without including the GST component.

So, in your case TDS on sale of property to be deducted at the rate of 1% excluding GST component under section 194-IA if the value of property exceeds Rs.50Lakh.

For any query. Contact [deleted]

Ajit Kumar Jain

CA, Mumbai

26 Answers

Talk to Ajit Kumar Jain

TDS needs to be deducted on amount without GST.

Yes builder would have charged GST from you but I think it would be over and above property value.

Naman Maloo

CA, Jaipur

4292 Answers

101 Consultations

Talk to Naman Maloo

1) For 1st & 2nd installment, interest would be applicable @1% w.e.f. 01.11.2018.

For 3rd installment, interest would be applicable @1% w.e.f. 01.12.2018.

2) Fee will also be applicable from the above same date's @Rs.200 per day. You need to pay both simultaneously.

3) If your wife did not made any payment then no need to file her statement. Just file 3 statements of yours.

4) Date of agreement of sale.

5) Excluding GST.

Vivek Kumar Arora

CA, Delhi

4948 Answers

1104 Consultations

Talk to Vivek Kumar Arora

Hi,

You need to mention amount without GST.

Payal Chhajed

CA, Mumbai

5188 Answers

298 Consultations

Talk to Payal Chhajed

1. Yes, there would be separate forms for each payment.

2. Yes, 26.10.18.

3. Yes, fees is applicable. Interest would be @1.5% for late deduction and @1% for late payment.

4. 26QB is filed on payment basis. If both of you have paid equally in these 3 installments, 6 forms shall be filed. If you have made the entire payments, only 3 forms shall be filed.

5. Date of booking.