Home Forum Income Tax Month 7 2023 2023 (7) This
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TDS - 194IA or 194M - Income TaxExtract To claim capital gain exemption under section 54 or 54F of Income Act , booking of on apartment in an ongoing project , it is treated as construction and not purchase of property. The developer is also charging GST on construction value since the superstructure is not complete. Invariably the developer also enter into Construction agreement. But for purpose of TDS, I have come across almost everyone is deducting tax of 1% u/s 194IA which came into force with effect from 01-06-2013. Effective from 01-09-2019 section 194M has come into force which provides for TDS of 5% by Individual and HUF on payments to contractors if the contract value exceed 50 lakhs which is the threshold limit for section 194IA also. In view of the above, I invite experts opinion on the Query whether an Individual paying amount towards apartment under construction should deduct tax at 1% or 5%.
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