335, Vipul Trade Centre, Sector-48, Sohna Road, Gurgaon
Mon - Sat: 9:30-18:00

Weekend MCQ Self Challenge 14 – TDS on Buying of Immovable Property

Special Focus on TDS on Buying of Immovable Property

 

Dear Professional Seniors & Friends,
Welcome to this wonderful weekend MCQ self challenge!

This weekend challenge is on TDS on buying of immovable property having 5 MCQs to be self answered by participants to take self challenge. The detailed answer of these MCQs shall be posted on Monday for the self assessment of the participants. This post shall be of immense use of the participant.

Weekend MCQ 14.1: Mr. X resident of India, purchases a property worth Rs 60 Lakhs situated at London from a person who is resident of India. Which among the following is correct?

(A) TDS u/s 194IA shall be deducted since seller is resident.
(B) TDS u/s 195 shall be deducted since property is located outside India.
(C) No TDS is required to be deducted.
(D) None of the above.

Weekend MCQ 14.2: What if in the above question, property is situated in India but the person selling the property is a non resident?

(A) TDS u/s 194IA shall be deducted since property is located outside India.
(B) TDS u/s 195 shall be deducted since seller is non resident.
(C) No TDS is required to be deducted.
(D) None of the above.

Weekend MCQ 14.3: What if in the above question, there are two sellers & payment of Rs 30 lakhs is required to be made to each seller?

(A) TDS u/s 194IA shall not be deducted since payment is less than Rs 50 lakhs to each seller.
(B) TDS u/s 194IA shall be deducted since payment is more than Rs 50 lakhs in totality.
(C) No TDS is required to be deducted.
(D) None of the above.

Weekend MCQ 14.4: Mr. X avails home loan of Rs 40 lakhs for buying property on 01.04.2013. Value of property was Rs 60 lakhs. On 01.05.2013, bank directly paid loan amount to builder to the tune of Rs 40 lakhs, remaining Rs 20 lakhs was paid by Mr. X to builder on 01.03.2018.

A) Both Bank and Mr. X are liable to deduct TDS.
B) Bank is only required to deduct TDS on Rs 40 lakhs.
C) Mr. X is only required to deduct TDS on Rs 20 lakhs.
D) No TDS is required to be deducted.

Weekend MCQ 14.5: What if in the above question, bank has paid the amount to builder on 01.08.2013?

A) Liability is on Mr. X to deduct TDS on full amount of Rs 60 lakhs.
B) Bank is only required to deduct TDS on Rs 40 lakhs.
C) Mr. X is only required to deduct TDS on Rs 20 lakhs.
D) No TDS is required to be deducted.

Sincere Regards

CA Sanjay Kumar Agrawal
Mobile: 9810116321

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

For All MCQ post please click on:
Webpage: http://www.casanjay.me/
Facebook: https://www.facebook.com/CA.Sanjay.K.Agrawal/
Linkedin: https://www.linkedin.com/in/ca-sanjay-kumar-agrawal/

Answer Weekend MCQ Self Challenge # 14

 

Dear Professional Seniors & Friends,

Warm Greetings!

This post of MCQ is on the provisions relating to TDS on sale of immovable property as per Section 194IA of Income Tax Act.

Answer to MCQ 14.1 : A)
Answer to MCQ 14.2 : B)
Answer to MCQ 14.3 : B)
Answer to MCQ 14.4 : C)
Answer to MCQ 14.5 : A)

Practical Analysis for MCQ 14.1 to 14.5

 The provisions of Sec 194IA are as under

• Effective Date – 1st June 2013
• Deductor – Any purchaser
• Deductee – Any seller being resident
• Time of deduction – At the time of credit or payment whichever is earlier
• Rate of TDS – 1% of the total consideration for transfer of immovable property
 Important Points to note are as under –

• Limit of Rs 50 Lakhs is on total sales consideration of property and will not apply to different sellers individually.
• If the immovable property is located in India but the seller is non resident, then no TDS is required to be deducted under this section rather TDS will be deducted u/s 195.
• No TDS is required to be deducted if transfer is of rural agricultural land(which is not a capital asset)
 Based on the above analysis, correct answer to MCQ 14.1 : A) TDS u/s 194IA shall be deducted since seller is resident notwithstanding the property is located outside India.

 Correct answer to MCQ 14.2 : B) TDS u/s 195 shall be deducted since seller is non resident notwithstanding the property is located in India.

 Correct answer to MCQ 14.3 : B) TDS u/s 194IA shall be deducted since payment is more than Rs 50 lakhs in totality.

 Correct answer to MCQ 14.4 : C) Mr. X is only required to deduct TDS on Rs 20 lakhs as total agreement value exceeds Rs 50 Lakh and bank is not required to deduct TDS as bank has paid the amount on 01.05.2013 i.e. before the date of applicability of the said section.

 Correct answer to MCQ 14.5 : A) Liability is on Mr. X to deduct TDS on full amount of Rs 60 lakhs as whole payment is done after the date of applicability of the said section. Moreover the liability to deduct TDS is on transferee only i.e. X and not on bank as bank is only remitting the amount to builder on behalf of transferee.

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards
CA Sanjay Kumar Agrawal
Mobile: 9810116321

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

For All MCQ post please click on:
Webpage: http://www.casanjay.me/
Facebook: https://www.facebook.com/CA.Sanjay.K.Agrawal/
Linkedin: https://www.linkedin.com/in/ca-sanjay-kumar-agrawal/

 

#CASanjay #MrCA #MsCA #MCQ #CharteredAccountants #CharteredAccountant #CA #India #SmartCA

Please Post Your Comments & Reviews

Your email address will not be published. Required fields are marked *