1027 Explain everything about TDS deduction on property sale (section 194 IA)(Live example)
Video Link -
Case methodology - Harvard case model
Narration - By Amlan Dutta
Madam Krishna decides to buy a property worth 85 lakhs in Dadar ...how does she go about TDS deductions on consideration value
Sh has been made aware that the TDS sections specify that she has to deduct 1 % TDS on consideration value under newly introduced section 194 IA
But she is bit confused ...so here we go
For all property sale where consideration value exceeds 50 lacs , the buyer will deduct 1 % TDS on consideration value to give that much TDS credit and and remit balance to the seller!
Say i am the seller , then krishna madam will deduct from the consideration value 1 % i./e 85000 as TDS and remit balance 84.154 lacs to me
For this deducted TDS , she will fill form 26 QB and once she pays the tax i.e deducts tax at source , she will be presented with a TDS certificate form 16 B ( much like form 16 that you guys know for salary TDS and form 16 A (TDS certificate ) known for non salary TDS!
If she fills the form 26 QB properly , then i as seller will get tax credit in terms of deducted TDS and this shall then appear on my form 26 AS tax credit statement !
At the end of the year , i will be using this tax credit to discharge my tax liabilities towards my total income.
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