Incorrect filing of TDS by Builder on behalf of Buyer
Husband & Wife jointly purchase under-construction property from a very reputed builder.The purchase entails Buyers to deduct 1 % TDS from the sale value and remit to govt. As per IT rules, TDS on the payments have to be remitted by each of the joint buyers in proportion to their ownership share.The builder got us to sign in the purchase agreement that he will file the TDS on our behalf,to help us ostensibly, but actually to get his TDS credit on time with out fail ! This is a usual practice followed by big time builders. But builder deducted full TDS from the 1st named buyer only, with out consulting us,may be for his convenience.This is clearly against IT rules in force,although full money due to govt has been remitted. Correcting this mistake is a huge task and we will be required to pay heavy penalty and running around.Builder refuses to help claiming that the buyers alone are responsible for TDS filing and he did it only to help us and that now he can not be held responsible. If the mistake is not corrected, IT dept are going to discover it when we file our IT returns,issue us notices and harass us. Can we haul the builder in front of Consumer Court for this mistake and insist that he gets it corrected at his expenses ? Below given is the clause in our purchase agreement:
“ The purchaser is aware that it is their responsibility to remit the TDS at the prevailing rate from time to time for all the payments made as per the schedule of payment excluding maintenance deposit and registration charges towards the unit purchased. The purchaser has authorised the Vendor to remit the TDS deducted on their behalf due to administrative reasons. The purchaser hereby undertakes to provide such certificate of deduction within 10 days of the request received from the Vendor “