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Oct 28, 2025
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TDS error: Father gets income tax notice after selling ancestral land jointly with son - how he won the case in Income Tax Appellate Tribunal
Selling joint property? Be careful of the income tax implications, TDS deductions, and how it needs to show up in your income tax returns. Each beneficiary has to keep an eye on tax implications, calculations of capital gains and TDS when filing their income tax return. Any mismatch could lead to an income tax notice seeking explanation.
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One such case where an income tax notice issued a father-son duo jointly selling their ancestral land for Rs 13 crore. The purchaser erroneously deducted the entire TDS amount of Rs 13 lakh solely under the father's name, instead of splitting it equally between both parties at Rs 6.5 lakh each. The son properly declared his Rs 6.5 crore share in his income tax return and settled the required taxes without taking any TDS credit.
The father submitted his income tax return belatedly under Section 139(4) of the Income Tax Act, 1961 on December 28, 2022 for AY 2022-23, declaring a total income of Rs. 2.76 crore (2,76,47,210).
In AY 2022-23, the jointly-owned ancestral land was sold for Rs 13 crore (13,00,00,000), with each party receiving Rs 6.5 crore (Rs 6,50,00,000). The purchaser withheld the complete TDS under Section 194A at 1%, totalling Rs 13,00,000, exclusively under the father's name.
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