Tds 1% on under construction flat

Naresh ji

1% TDS is applicable to under construction flat ther is no such limit of Rs. 50 lakh or more or less.

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Dear Bharat ji,

THanks for the quick reply. But the section 194IA says that the TDS is applicable only for immovable properties whose total consideration is above 50Laks. I was just confused on whether it is applicable in case of Under construction property where the UDS alone is above 50 Lakhs OR  or applicable if the total consideraton including UDS and Construction cost both together is  above 50Lakhs. Becuase as I have mentioned above the UDS is only 30Lakhs here....but overall cost including construction cost is above 50Lakhs. THat is why have some confusion. Pls clarify.

Dear  Client,

                   If total conaderation of under construction flat is above Rs.50 lakhs 1% TDS is to be deducted  by the buyer and  deposited in Governemnt account as per section 194 Income Tax act 1961.So the total cost  you should   take into consideration while applying !%TDS to  be deducted by the buyer and  deposited in Government acount. I think this is 1% is cess towards welfare of the weaker sections as per  a recent legal query I answered. QWhen you spent  nearly 1 crore towards the purchase of  Flat under construction  out   of which 1%  TDS  would amount  to Rs.95,000 you should be prepared to pay.

Dear Naresh,

For deduction under Sec 194IA, there is no concept of UDS or construction cost or underconstruction flat. The TDS needs to be deducted on the amount you are going to pay to the developer/builder for the flat as per the agreement irrespective whether the flat is under construction or available for possession. The total consideration to be paid to developer would be (i.e in your case 94.05 Lakhs) and deposit to the govt Rs.95,000 against developers PAN number, effectively paying developer 95Lakhs.