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TOPIC: TDS implication on land owner flat

TDS implication on land owner flat 2 months 1 week ago #8860

I am buying an under construction flat from the land owner's share in Hyderabad. Overall value of the flat is more than 50 lacs. There is a sale agreement and a work order and the total value of the flat is divided between the two, each less than 50 lac. The land owner is insisting on creating a third party work order on her husband's name and not on her own name, and I have been informed by the builder's agent that since there is a third party work order and a sale agreement each of value less than 50 lac and on different names, I would not have to deduct and pay TDS. I wanted to know if this is correct? Would I really not have to deduct and pay TDS because the overall value of the flat has been divided between a sale agreement and work order on a third party's name? I doubt this and would really appreciate your help in this regard.
  • Lavneesh
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TDS implication on land owner flat 2 months 1 week ago #8861

Hi Lavneesh,

Based on my understanding, purchaser needs to pay a 1% TDS on a property if the total consideration for the property is greater than 50 lakhs. In this case, I believe even though you are paying two people for amounts less than Rs. 50,00,000, you would need to deduct TDS at source and pay it to the government.

I would suggest checking with a CA to confirm this, in case of doubts or calling this out in front of the builder and land owner.

Thanks,
Krish
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