Tax Deduction at Source (TDS) is a very familiar yet a complex topic to understand. With time many changes are incorporated in TDS section. Whenever we go through TDS matter we encounter some or other issues.    Today, we all must be very comfortable with the provision of section 194IA i.e., TDS on purchase of immovable property. Payment for purchase of property is liable for deduction of tax under section 194IA. Section 194IA of the Income Tax Act provides for deducting TDS on any payment made for purchase of immovable property (other than agricultural land). Such deduction shall be made at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier. In respect of this section, following key points shall be noted: i)       Transferor shall be Resident ii)     Deduct 1 per cent on payment made iii)   No deduction shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees. iv)  Provisions pertaining to Tax Deduction and Collection Account Number i.e., section 203A, shall not apply to a person deducting tax at source under Section 194-IA. v)    Any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of seven days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB. Till now, we have learned these provisions by-heart. So, you must be wondering why again the same provisions are laid down infront of you. Just hold on, through this article we are trying to find a solution to a case. In case, we purchase a property, we all deduct tax while making payment to the seller and the seller claims that tax while he/ she file their return. Till this point everything is normal. Now, in another case, we purchase a property and made part payment after deducting TDS. Before maturity of the deal, the deal gets cancelled. Due to cancellation of deal, the seller refunds the amount paid by the purchaser including that amount of TDS paid by the deductor. Now, how shall deductee claim this amount? If you are thinking of revising Form 26QB then let me remind you that it is not possible as Form 26QB does not have that option. If not revising even then you may say that answer to this may be simple i.e., by claiming it while we file our return like in earlier case. But the issue here is when we claim TDS in our return, there will be no corresponding income in our books. Whereas, 26AS will show TDS amount as well as correspondent income. Due to this, there will be a mismatch between 26AS and our books of accounts. This may lead to a demand notice in our hand. We may receive an intimation regarding this. Many of us are scared of the word ‘hearing’. It is like extra burden and extra cost on part of the deductee. Example: On 1^st January 2014, Mr. A purchases a property from Mr. B for Rs. 90lacs. On the same date A had to pay Rs. 20lacs as down payment. A paid the same after deducting TDS @ 1 per cent. From February to April, A had to pay Rs. 10lacs each month. The same was paid by A after deducting TDS on Rs. 10lacs each month @ 1 per cent. TDS was duly deposited by MR. A. On 1^st May, somehow deal got cancelled. Now, Mr. B shall refund total payment made by Mr. A. It means B shall refund Rs. 50lacs to A and B shall claim TDS deducted and deposited with the government. Now, 26AS will show income of Rs. 50lakhs which will be missing in books of accounts. The question arises that if we are following all tax rules and regulations then to get the refund why we have to through the intimation and hearing path. When no violation of rules is done then why an extra burden is put on us. For this issue there must be a simple and easy way for assessee to claim refund in such case. Through this, we request the department to incorporate an option which can be availed in this situation and where assessee does not have to face hearing. Is Intimation and Demand the only option if deal where TDS u/s 194IA deducted gets cancelled? _____________________________________________________________________________________________________