Short deduction of TDS in case of Purchase of Immovable Property

[garg.pulkit131]

Hi,
I have a query. A person purchased an immovable property worth 60 lakhs in Feb-24 and deducted TDS @1% as per 194IA. However, the buyer PAN was inoperative and therefore TDS was supposed to be deducted at 20% but instead buyer deducted the TDS @ 1% only. All the payment for consideration has already been paid to seller by buyer.

Now Buyer has received a notice for shortfall of 19% TDS as the seller PAN is still in-operative even after 31st may (a circular was issued recently wherein it was provided that if the deductee PAN is made operative by 31st May then deductor shall not be liable for default on account of shortfall) and is being saked to pay 11,40,000 (12 Lakhs - 60k already paid). What should buyer do in this scenario as he is un-necessarily required to make the payment worth 11.40 lakhs.

[Surbhi_Pal]

Hey @garg.pulkit131,

Here’s are 2 threads where this issue has been discussed in detail. Let us know if you still have doubts.

TDS processed with defaults u/s 200A

Hello Folks, I and my wife recently purchased a property in Noida worth 1.05cr. I paid 1% TDS accordingly. After paying TDS we got the defaults notice u/s 200A. We were shocked to see the short deduction amount. After downloading the justification report from traces, we learned that seller PAN was inoperative. Means he didn’t link PAN with Aadhar. It was not our fault in any way. Any way we got his PAN and Aadhar linked and raised Correction request in TRACES. But we again got defaults u/s 154 …

Form 26QB: TDS default u/s 200A due to inoperative PAN

Many homebuyers are receiving notices to pay 19% TDS due to the seller’s PAN being inoperative. But Why? So, it all starts from the buyer of a property filing form 26QB and depositing the TDS in the seller’s name. What is Form 26QB? Form 26QB is a return-cum-challan form used for paying TDS to the government. If you are the buyer of a property, you will deduct a 1% TDS from the total amount to be paid to the seller, and deposit this TDS by filing form 26QB. This TDS will be reflected in the …

[garg.pulkit131]

Thanks @Surbhi_Pal. While the threads address most of the concerns, however, in my case the seller is not cooperative. Neither he has linked his PAN with Aadhaar yet and nor he is ready to pay the amount which we are supposed to pay now due to default on his part. What should be done in this case?

[Ashish_Jindal]

I also have same concern.

Received 20 percent TDS demand notice due to seller inoperative pan as it was not linked with aadhar.

What is the final solution in this case. Please suggest

Thanks
Ashish

[Sairam_Reddy_B]

Were you able to resolve this issue @garg.pulkit131 @Ashish_Jindal
Email:bobbalasairamreddy@gmail.com

[CA_Jayni_Bhavsar]

Hey @Ashish_Jindal

Since the PAN was not linked with Aadhar, the notice issued by ITD is correct and in such case, you are required to pay the demand within the time limit prescribed by ITD.