TDS U/S 194IA: TDS ON TRANSFER OF IMMOVEABLE PROPERTY
TDS stands for Tax Deducted at Source. TDS is a kind of tax that is deducted by the payer before making certain payments like Salary, Rent, Commission, Interest, Royalty, Professional Fees etc. to the payee.
TDS is required to be deducted at the source if the money to be paid and the money already paid exceeds a specified amount.
The Payee can claim this tax deducted by the payer while paying his income tax liability for the year, and if the TDS deducted is more than the income tax liability of the assessee then he/ she will be entitled to a refund.
The main purpose of introduction of TDS was to reduce the Tax evasion by the person receiving the income.
Note: –
Payer- A payer is a person or organization who is responsible for deducting TDS before paying the amount to Payee.
Payee- A Payee is a person or organization who receives the payment from the payee after the TDS deduction.
Section 194IA of Income Tax Act, 1961 mandates that TDS to be deducted by the buyer when purchasing immoveable property (other than rural agriculture land), be it residential or commercial from a resident person during the F.Y.
A rural agricultural land is considered rural if:
TDS is required to be deducted: –
Or
Few examples of date of deduction are: –
|
S.no |
Date of Payment |
Date of crediting the party in books of accounts |
Date of TDS deduction |
|
1. |
30/04/2024 |
30/04/2024 |
30/04/2024 |
|
2. |
30/04/2024 |
01/05/2024 |
30/04/2024 |
|
3. |
01/05/2024 |
30/04/2024 |
30/04/2024 |
|
4. |
01/05/2026 |
30/04/2024 |
30/04/2024 |
TDS is to be deducted by the buyer while purchasing immoveable property (other than rural agriculture land), be it residential or commercial from a residential seller if the value of the property (SDV or Consideration) exceeds Rs. 50,00,000.
NOTE: –
This section i.e. TDS on payments related to transfer of immoveable property is not applicable if the seller is a non-resident person.
Example: –
Mr. Josh a resident of United States sold immoveable property to Mr. Mayank in India. Does the provision of Section 194IA applies?
The TDS rate under this Section is: –
|
Sl no. |
Nature of payment |
TDS if pan is available |
TDS if pan not available |
|
1. |
Payment of transfer of immoveable property |
. 1% |
. 20% |
NOTE:
In case the PAN & AADHAR of the seller is not linked then the TDS rate will be 20% instead of 1%.
No TDS if: –
The due date for deposit of TDS is as below: –
|
Month |
Due Date |
|
April |
On or before 31st May. |
|
May |
On or before 30th June. |
|
June |
On or before 31st July. |
|
July |
On or before 31st August. |
|
August |
On or before 30th September. |
|
September |
On or before 31st October. |
|
October |
On or before 30th November. |
|
November |
On or before 31st December. |
|
December |
On or before 31st January. |
|
January |
On or before 28th February. |
|
February |
On or before 31st March. |
|
March |
On or before 30th April. |
TDS is to be deposited monthly on the dates mentioned above also the statement of TDS has to be filed monthly as follows: –
|
Quarter |
Period |
Due date (TDS filing) |
|
1St quarter |
April-June |
31st July. |
|
2nd quarter |
July-September |
31st October. |
|
3rd quarter |
October- December |
31st January. |
|
4th quarter |
January- March |
31st May. |
TDS under this section has to filed monthly through FORM 26QB and the deductor has to issue FORM 16B to the employee after filing of return within 15 days of filing return.
Following penalties/fees will be levied if there is delay in TDS deduction or delay in deposit of TDS or non-filing of quarterly return.
|
Particulars |
Penalty |
|
TDS not deducted on time. |
1% per month or part of month. |
|
TDS deducted but not deposited before due date |
1.5% per month or part of month. |
|
Additional penalties |
Up to Rs. 1,00,000 for non-filing or errors in TDS statement |
Q. What is the threshold limit for TDS under 194IA?
A. The threshold limit for TDS under 194IA is Rs. 50,00,000.
Q. What do you mean by consideration under 194IA?
A. Consideration for transfer of immoveable property includes club membership fees, car parking fees, maintenance fees, advance fees, or any other similar charges incidental to transfer of immoveable property.
Q. Is 194IA applicable when purchasing immoveable property from non-resident?
A. No, this section is not applicable while purchasing immoveable property from non-resident persons.
Q. Are all agricultural land exempt from provision of 194IA?
A. No, only rural agricultural land is exempt from the provision of 194IA, urban agricultural land will attract TDS under the provisions of Section 194IA.
Q. Is it mandatory to obtain tax deduction account number (TAN) to deduct TDS under Section 194IA?
A. No, TAN is not required to deduct TDS under Section 194IA as PAN is used for filing of 26QB statement.
Q. What do you mean by SDV?
A. It means the value adopted or assessed by any authority of a state government for the purpose of payment of stamp duty.
Add a Comment