Why Ahmedabad Sellers Need to Plan TDS Now
Recent tax changes have hit Ahmedabad property sellers hard, especially with Section 194IA triggering automatic 1% TDS on deals above ₹50 lakh. Many sellers panic when buyers deduct excessive tax, unaware that strategic planning can prevent irreversible cash flow hits. Crucially, the ITAT Ahmedabad ruling in Archanaben Rajendrasingh Deval Vs ITO confirmed thresholds apply per seller—not collectively. If three co-owners each receive ₹40 lakh (total ₹1.2 crore), zero TDS applies since individual shares stay under ₹50 lakh. This game-changing interpretation protects fragmented ownership common in Ahmedabad's joint-family properties.
Critical Documentation Checklist
Avoid rejection headaches by getting these ready before signing:
- Seller's PAN Card: Mandatory—missing PAN inflates TDS to 20% under Section 206AA
- Ownership Proof: Registered sale deed + latest municipal tax receipt
- Cost Evidence: Original purchase invoice with stamp duty value (indexation requires this)
- NRI-Specific Needs: For overseas sellers, Form 15CA/15CB becomes non-negotiable
Pro Tip: Ahmedabad buyers often ignore revenue records classifying land as agricultural. A major exemption under Section 2(14)(iii). Verify your property's status via Talati records. Avoid paying TDS on non-taxable property and transactions
Deadline Management That Saves Money
Sellers get blindsided by missed deadlines, losing refund momentum. Track these dates religiously:
- TDS Certificate (Form 16B): Demand this from buyers within 15 days of quarterly TDS return filing
- Refund Claim: File ITR within 12 months of sale year end; delays beyond 24 months forfeit interest
- NRI Refunds: Expect 6–8 months processing—submit physical ITR copies if e-filing fails
Critical Insight: If your Ahmedabad property’s stamp duty value exceeds the sale price (common in Gandhinagar-adjacent areas), buyers deduct TDS on the higher figure. Pre-empt this by obtaining a registered valuer’s certificate proving a lower market value.
Reclaiming Over-Deducted TDS: The Reality
Many sellers assume excess TDS automatically refunds through ITR—this is dangerously wrong. Follow this sequence:
- Cross-verify TDS credit in Form 26AS within 45 days
- If discrepancies exist, file a TDS correction request via the TRACES portal
- Claim refunds only after Form 26AS reflects accurate credits
Ahmedabad-specific pitfall: Buyers sometimes deposit TDS after agreement signing but before possession transfer. This creates dual TDS scenarios if possession occurs next fiscal year. Insist on conditional TDS payment clauses tied to RERA completion certificates.
Smart Seller Tactics for 2025
- NRI Sellers: Apply for Certificate u/s 197 before sale to reduce TDS rates, LTCG tax often falls below 20% with indexation
- Joint Ownership: Structure agreements showing individual shares below ₹50 lakh (per ITAT ruling)
- Agricultural Land: Conduct strip surveys if near municipal limits, Ahmedabad’s expanding jurisdiction frequently misclassifies farms
Remember: TDS isn’t your final tax liability. A ₹1.2 crore Ahmedabad apartment sale might owe only 8% LTCG after indexation, but buyers deduct 20% upfront if documentation falters. Arm yourself with precise compliance—because in Ahmedabad’s volatile market, every rupee retained today funds your next strategic move.