Question ID : 41074

tds u/s 195 on sale of long term property

what is the consequence on buyer for non deduction of tds u/s 195 for 1cr? seller being a nri has sold a property of rs 5 cr on a agreement to sell dated 26.04.21 and taken adv of rs 1 cr dated 26 april 21 and applied for lower deduction of tds in form 13 on 30 april 21. now lower ded cert comes of amt 4 cr only instead of 5 cr. now buyer has ded tds on whole 5 cr amt at a lower ded as mentioned in lower ded cert. will buyer be liable to deduct tds at normal rate as per sec 195 on 1 cr or at lower rate itself. if on 1 cr tds at lower rate ded instead of whole rate as mentioned in 195 then what consequences buyer wl bear?

Answer ID : 81165

Hello, I am of the opinion that the TDS on advance payment of INR 1 cr should have been deducted at normal rates and the lower deduction rate would be applicable only on remaining INR 4 cr amount. In case of non deduction, the buyer will be deemed an assessee in default against whom the department can initiate proceedings to recover due taxes along with interest & penalties for this non compliance. Therefore the best approach would be to pay the requisite taxes and adjust the same from remaining payment. Best regards,

Answer ID : 81166

Hello, I am of the opinion that the TDS on advance payment of INR 1 cr should have been deducted at normal rates and the lower deduction rate would be applicable only on remaining INR 4 cr amount. In case of non deduction, the buyer will be deemed an assessee in default against whom the department can initiate proceedings to recover due taxes along with interest & penalties for this non compliance. Therefore the best approach would be to pay the requisite taxes and adjust the same from remaining payment. Best regards,

Answer ID : 81168

Buyer is liable to deduct tax at full rate on one crore. Since the buyer failed to do so , the buyer is liable to pay penalty under section 271C. So the buyer may make good the default at the earliest and reply to the penalty , if initiated by the department, on mercy grounds.

Answer ID : 81169

Buyer is liable to deduct tax at full rate on one crore. Since the buyer failed to do so , the buyer is liable to pay penalty under section 271C. So the buyer may make good the default at the earliest and reply to the penalty , if initiated by the department, on mercy grounds.

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