Examine the obligation of Tax Deduction at source/Tax Collection at source in the following cases keeping in view the provisions of the Income-tax…
CA Final · Direct Tax Laws and International Taxation · PYQS · September 2025
Examine the obligation of Tax Deduction at source/Tax Collection at source in the following cases keeping in view the provisions of the Income-tax Act, applicable for Assessment Year 2025-26: Mr. A and Mrs. A jointly purchased a fully built-up and ready to move flat at Lucknow on 10.12.2024 from M/s XYZ Builders Limited for 86Lacs. In addition, they have paid an amount of 4Lacs for two car parking spaces to the M/s XYZ Builders Limited. They also paid one time generator cost of 2,50,000 and swimming pool cost of 1,50,000 to the M/s XYZ Builders Limited. The stamp duty value of the property is 75lacs. Mr. A and Mrs. A, each paid 47lacs to the Builder for effecting the sale deed on 10.12.2024.
Suggested Answer and Working Notes:
As per section 194-IA, consideration for transfer of any immovable property include all charges in the nature of, inter alia, parking charges, generator cost and swimming pool cost. In case of more than one transferee, consideration shall be aggregate of amount paid by all the transferees for transfer of such property. In the present case, since aggregate value of consideration of both transferees i.e., of Mr. A and Mrs. A not less than 50lakhs, tax is required to be deducted at source under section 194-IA @1% on 94 lakhs or 1% on 47 lakhs by Mr. A and 1% on 47 lakhs by Mrs. A since consideration of 94lakhs is higher than stamp duty value of 75lakhs on purchase of flat from M/s XYZ Builders Ltd.
Topics: Deduction, Collection and Recovery of Tax
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