TDS Saga on Purchase of Immovable Property

August 18, 2021

194A provides for TDS on any sum credited by way of consideration for transfer of any immovable property
194A is not applicable on security deposit given by developer to land owner (Prestige Estates Projects Ltd)
TDS is on transferee paying to Co-transferor > 50 lacs individually. So no TDS on payment to a Co-owner receiving below 50 lakhs (Bhikhabhai Patel & Vinod Soni cases)
payment of 60 lacs to POA holder of jointly owned property – no TDS as individually consideration is only 30 lacs to each owners (Oxcia Enterprises)
Once Tds is deducted, tax cannot be collected from deductee for reason that deducator failed to deposit (Yashpal Sahni case)
TDS not applicable if 3 properties are purchased from same seller and consideration of each property is below 50 lakhs but aggregate is above (Shakti Builders & Developers)
However since intention of introducing 194A was to have a reporting mechanism of transactions in the real estate sector and also to collect tax at the earliest point of time, other view are not free from doubt