TDS on auctioned sale from bank

TDS & TCS
1

Hello Everyone,

Could you please help me understand how to pay TDS on a property purchased at auction from a bank?

1 Buyer and 2 Owners for this property

I understand I need to split the total value of the property and pay a proportion of 1% TDS on each owner’s PAN.

But, the auctioned amount is less than the Stamp duty value of the property (which includes the value of the building in the property)

I read in the rules section that we should consider the higher value for the TDS calculation. In my case, it is the stamp duty value of the property.

But the bank told me that I only have to consider the auctioned amount for the TDS calculation.
And the stamp duty value is only considered for the registration.

Could someone please clarify?

Any help is much appreciated…

2

Hey @mshfq

Let me answer your queries one by one:-

  1. If the stamp duty value exceeds 110% of the actual sale consideration, the stamp duty value will be considered as the deemed sale value for income tax purposes and TDS to be deducted on this amount.

  2. In Form 26QB, the total sale consideration should reflect the full value of the property, while the amount paid should indicate the seller’s proportionate share.

Hope this helps!

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3

Thank you for the detailed reply @Ayushi_Joshi

But the bank is insisting on paying TDS on the auction amount, and they would only refund 1% of the auction amount.

The person who assists with registration, who is also an advocate, shares the same opinion.

But the law states otherwise. I am confused.

4

Hey @mshfq

If the stamp duty value of the property is higher than the actual purchase price, TDS at 1% must be deducted on the stamp duty value. Failing to do so may result in a notice for short deduction of TDS from the Income Tax Department.

Hope this helps!

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5

TDS on auctioned bank property sales is deducted at 1% for property over ₹50 lakhs under Section 194-IA. Buyers must deposit it with the government and file Form 26QB.

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