CBDT Says TDS Applicable on EDC Paid To HUDA In Haryana – Big Impact On Haryana Developers & Builders

In its Official Memorandum No. F.No.370133/37/2017-TPL dated 23rd December, 2017 the TPL Division of CBDT has clarified that EDC Paid by Builders / Developers in Haryana to HUDA is Liable to TDS. 

Here is the Bare Text:- 

Sub: Recommendations for relief from applicability of TDS provisions on External Development Charges (EDC) payable to Directorate of Town Country Planning (DTCP) – State Government of Haryana -regarding.

Kindly refer to your letter dated 21st November, 2017 addressed to the Finance Secretary, along with the enclosures on the captioned subject.

2. In this regard it is submitted that provisions of non-deduction of tax under Section 196 of the Income-tax Act, 1961, is applicable to the Government and to the other authorities as mentioned under the Section. Accordingly, External Development Charges (EDC) if paid to Government of Haryana would be exempt from TDS provisions. However, in the instant case, it appears that the developer has made the payment in the nature of External Development Charges (EDC) not to the Government but to HUDA (Haryana Urban Development Authority) which is a development authority of State Government of Haryana and is a taxable entity under the Income-tax Act, 1961. Hence, TDS provisions would be applicable on EDC payable by the developer to HUDA.

3. It may be mentioned here that section 194 of the Income-tax Act, 1961 provides for non­deduction of tax in suitable cases. The HUDA may resort to aforesaid provision for exemption of TDS with regard to payment of EDC.
4. This issues with the approval of Finance Secretary.

The Authenticity of Document is not Vouched For. The Copy can be downloaded from Here

CA Ankit Gulgulia (Jain) | +91-9811653975

Related Tags ArticlesCBDTIncome TaxIncometax 

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