The builder is asking for full payment without TDS.

[TradeWise]

I recently booked a flat worth ₹51 lakhs and deducted 1% TDS on that, but now the builder is demanding full payment without TDS. What am I supposed to do legally?

[Siddarth]

Under Section 194-IA, buyers must deduct 1% TDS on property purchases over ₹50 lakhs. For a ₹51 lakh property, this amounts to ₹51,000. Buyers should ensure the builder receives ₹50.49 lakhs after TDS deduction and provide Form 16B as proof for tax credit. Non-compliance can lead to penalties, making it essential to deposit the deducted TDS with the government promptly to avoid complications.

[TradeWise]

Thanks for the quick reply.
Could you clarify how I should go about deducting and depositing the 1% TDS? What kind of proof do I need to provide to the seller to prevent any potential disputes?

[Siddarth]

@TradeWise
To manage the 1% TDS, first calculate it when you make a payment. Subtract this TDS from the total amount to follow tax rules. After deducting it, deposit the TDS with the government, either online or at an authorized bank, and get a challan receipt as proof. To keep things clear and avoid any problems, send this receipt along with Form 16B to the seller to show that the TDS has been deducted.