I want to buy a property in the name of my husband and wife. The value of the property is more than 50 lakhs. The husband insists that the TDS on the proceeds from the sale of the property The tax will be deducted in your name and your name will be mentioned in Form 26QB. But the cheques for the net sale proceeds are to be issued in the name of your wife. Is it justified that the tax is deducted in the name of the husband while a cheque for the sale proceeds is issued in the name of his wife?
As per the provisions of Section 194IA, every purchaser of land or building is required to deduct tax at source @ 1% of the amount payable to the resident seller, where the total value of the property exceeds fifty lakhs. property If the property is in the name of both owners, a deduction should be made from the payments made to the respective co-owners in the proportion in which each co-owner has contributed to the cost of the property, provided that the co-owners provide such details to the prospective purchaser(s). If such details are not provided, the purchaser is justified in presuming that the property is owned equally by the respective co-owners, deducting the tax and making the appropriate payments.
Can TDS be deducted on sale of property in husband’s name while payment is made to wife?
The name in which the payment is to be made should be the same as the name appearing in Form No. 26QB filed with the Income Tax department. In your case, since the tax is to be deducted from the payments to be made to the seller, it is not logical or possible for you to accept the suggestion made by the seller to deduct the tax in your name and issue the cheque for the payment of the house in the name of your wife. I am unable to understand the reason behind the strange request made by the husband.
To fully comply with the requirement of the law, you must issue the check in the name of the taxpayer from whom the tax will be deducted.
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Balwant Jain is a tax and investment expert and can be contacted at [email protected] and @jainbalwant on his X account.
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