Fine regarding late payment of 1%TDS for property

[Sundar]

I was paying 1% TDS amount whenever the fund was released for each floors of my apartment. This was routine till 14th floor out of 31 floors till 11th May 2019.

At 19th June 2019 I received a mail from CRM of builder mentioning that TDS amount was not applicable to me due to the discount provided. 

After 5 years, I received a call from builder for registration and we have registered it on 17th May 2024. During that time they haven’t intimated me about the 1% TDS. If it was mentioned that time I would have paid it.

After a year, i.e. on 27th June 2025 I received a call from CRM of builder saying that we have to pay 1% TDS since the sale deed value is more than 50 lakhs. When I discussed with him about the mail we received on 19th June 2019 which mentioned that TDS is not applicable, he said it was wrong calc. from that CRM who has left the job already and he insisted me to pay TDS ASAP.

I paid the remaining TDS amount on 3rd July 2025. On 6th July 025 I received mail intimation from TDS CPC mentioning that default have been identified and I should pay Rs. 76,600/ - as late fee.

. Can someone please guide in resolving his issue.

[Ryan Vaz]

You, as the buyer (transferee), were legally obligated to deduct TDS at 1% on the consideration exceeding Rs. 50 lakhs at the time of credit or payment, whichever was earlier, and deposit it with the government. The builder's incorrect advice does not absolve you of this statutory responsibility. The late fee of Rs. 76,600 demanded by TDS CPC under Section 234E is for the significant delay in filing Form 26QB, and you are liable to pay it, along with potential interest under Section 201(1A).

AI Summary

Property TDS compliance requires timely deduction and Form 26QB filing; builder advice does not excuse default. The buyer of immovable property must deduct 1% TDS on consideration exceeding the prescribed threshold at the time of credit or payment, whichever is earlier, and deposit it as required. Incorrect advice from the builder does not remove this statutory responsibility. Delay in filing Form 26QB can attract a late fee under the TDS default provisions, and interest may also be payable for delayed deduction or remittance.