Purchasing a property ? Don’t miss out on deducting TDS u/s 194IA before making payment. The title is enough to explain what this article is going to be about. The TDS law has come up where any person purchasing a immovable property other than agricultural land is required to deduct TDS u/s 194IA and deposit the same within 30 days by filing challan cum statement in form 26QB.
What is TDS U/S 194IA ?
| Key Extracts | Details |
|---|---|
| Deductor | Any person ( Individual/HUF/Firm/Company/Society/LLP) |
| Deductee | Resident Person only |
| Rate of TDS | 1% |
| Threshold | Consideration for transfer or stamp value of property exceeds INR 50,00,000 |
| Consideration for transfer inclusions | All the charges incidental to transfer of immovable property (such as club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature) will be added and then TDS will be deducted. |
| Type of immovable property on which this TDS provision applies | All kind of immovable property including land or building or part of building but excludes agricultural land. |
| Challan Payment and return filing | Use Form cum statement 26QB. Link refer >> https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp |
| Due date of Deposit of TDS | within 30 days from end of the month in which payment is made |
| Non applicability of 194IA | In case 194LA is applicable and payment of compensation is received on compulsory acquisition of immovable property |
| Deduction Proof | Buyer/Deductor of the property to provide Form 16B to deductee |
Challenges and potential solutions in implementing TDS U/S 194 IA
| Challenge | Potential Solution |
|---|---|
| Payment made by Third party i.e. bank in case of loan than how and who will be responsible to deduct TDS | Bank will not deduct TDS and the responsibility lies in hands of buyer to ensure that when payment is being made by bank corresponding TDS amount is paid to Central government within the due date mentioned above. |
| TDS in case payment is being made in installments | Buyer of immovable property has to ensure that on each payment/installment TDS is deducted @ 1% and same is paid to Central government within the due date mentioned above |
| Whether the buyer needs to obtain TAN number | No, buyer simply has to deduct TDS and file challan cum form 26QB wherein no need to obtain TAN number. |
| How to generate form 16B ? | 1. Register as “Taxpayer” using PAN and then click on login. 2. Go to downloads section >> Enter the details pertaining to the property transaction for which Form 16B is to be requested. Also enter the Assessment Year, Acknowledgment Number, PAN of Seller and click on “Proceed”. 3. Click on submit. Go to requested downloads and download the form. |
| Is TDS U/S 194IA is only applicable to individual and HUF on whom tax audit is applicable | No, TDS U/2 194IA is applicable to all individuals and HUF whether tax audit is applicable or not. |
| If Stamp Value is less than 50,00,000 and Sales consideration is more than 50,00,000 or vice versa is TDS required to deducted under this section | Yes, as the section clearly mentions if both Stamp Value and sales consideration is less than 50,00,000 then only no TDS is required to be deducted under this section. |
| Whether Late Fee u/s 234F is applicable? | Yes, since Form 26QB is challan cum statement. Late Fee is applicable @200 per day till default is continues similar to other case of TDS return filing. |
| Whether Interest for short payment or late payment is applicable? | Yes, Interest is applicable at 1% and 1.5% per month or part of month similar to other case of TDS short payment or late payment. |
| How to make payment in case of demand U/S 194IA | A separate payment option – “Payment of demand raised by CPC-TDS against TDS on rent on property” is available. |
| In case of co-owners of property | In case of multiple buyer, Form 26QB has to filed for each of the buyer by deducting TDS on proportionate basis for each of the buyer. |
Documents required for filing this form
- PAN number of seller and buyer
- Address of Buyer
- Property Details
- Payment ( Installment/Lumpsum)
- Payment of TDS
Need Expert Assistance for deduction, payment of TDS and form filling of TDS in Udaipur and Rajasthan
For expert assistance for deduction, payment of TDS and return filling of TDS in Udaipur and Rajasthan, reach our professionals at Tax Ledger Advisor. Also refer other articles on TDS from TaxLedgerAdvisor >> https://www.taxledgeradvisor.com/section-194-r-deduction-of-tax-on-benefit-or-perquisite/