Mahesh S
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TDS on under construction property
Q: I have agreed a total value with the builder and am now told about the TDS rule. Should I be paying this or should I remove the TDS component when I pay the builder?

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Hi Mahesh! The TDS should be deducted when the property is handed over and the final payment is made. For under-construction property, the buyer is considered to hold an interest in the property and for taxation purpose is not considered the owner until completion.
Thanks for the inputs. From a pure cash flow point of view, will the money be going out of the buyer's pocket or the developer's pocket? For example, if the agreement value is Rs 100, will the buyer be paying only Rs 99 to the developer and the Rs 1 is given by the developer? Or will the entire money come from the buyer's pocket?
11th February 2016

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