TDS on transfer of Immovable Property Transferred by Resident

TDS on transfer of certain immovable property other than agricultural land

Section 194IA was introduced by Finance Act, 2013 to bring transaction on Immovable Property into ambit of TDS provisions under Income Tax Act, 1961. As per this section, Tax Deducted at Source (TDS) is required to be deducted by Transferee on making payment to Transferor for purchase of immovable property.

Who need to deduct TDS

Any person (transferee) responsible for paying a sum for transfer of an immovable property to Resident Transferor.

Threshold limit for Applicability of Section 194IA

Section 194IA is applicable only where the consideration for transfer of immovable property shall be 50 Lakhs or more.

When to Deduct TDS

TDS is required to be deducted:

   1)    at the time of credit of such sum in account of the transferor or   

   2)    payment of such sum in cash or by cheque or draft or any other mode

whichever is earlier.

Where payment is made in installments, TDS should be deducted on installments only.

Rate of TDS

TDS is required to be deducted at 1% (one percent) of amount credited/amount paid.

Immovable Property

Immovable property means any land (other than agricultural land) or any building or part of a building.

Agricultural Land means agricultural land in India not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2

Responsibility of Purchaser of Immovable Property

• Deduction of TDS at 1 % on payments being made where consideration for transfer of immovable property exceeds Rs. 50 Lakhs or more
• Obtain Permanent Account Number (PAN) of Sellers
• No Tax Deduction Number (TAN) is required for filing of TDS return in form 26QB and only PAN of sellers and purchasers are required
• Filing of online form 26QB at http://www.tin-nsdl.com website to report transaction related to sale -purchase of immovable property. PAN of sellers and purchasers are mandatorily required to quote in form 26QB.
• TDS may be deposited :

§  either through e-payment facility at the time of filing of 26QB or thereafter using net banking facility

§  or using electronic payment facility at authorized banks

• In case the seller does not furnish his PAN, tax will have to be deducted at 20 percent.

Time-limit for deposit of TDS in Government A/c

TDS deducted in a month is required to be deposited within a period of thirty 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.

TDS Certificate

TDS certificate is required to be issued in form 16B within 15 days from the due date for furnishing the challan-cum-statement in Form No. 26QB.