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(194IA)
AUTHOR :ARSTG
https://taxguru.in/income-tax/notices-related-tds-immovable-property-purchase.html
Understanding of Notice, Penalty, Late fees and Interest on TDS under Section 194IA for Purchase of
Immovable Property
As we all know that TDS is applicable on transfer of Immovable property, wherein the consideration of the
property exceeds or is equal to ? 50 Lakhs. Sec 194IA of the Income Tax Act, 1961 read with Rule 30, 31 and
31A of Income Tax Rules states that:
For all such transactions Tax @ 1% should be deducted by the buyer of the property at the time of making
payment of sale consideration.
Tax so deducted should be deposited to the Government Account trough e-tax Payment option (Net
banking) or any of the authorized bank branches. Any sum so deducted under section 194 IA shall be
required to be paid to the credit of the Central Government within a period of Thirty days from the end of
the month in which the deduction is made.
PAN of seller as well as buyer should be mandatorily furnished in an online Form 26QB for furnishing
information regarding the property transaction.
TDS certificate in Form 16B is required to be issued by the Buyer of property to the Seller, in respect of
the taxes deducted and deposited into the Government Account.
Page Contents
Person responsible for Tax Deduction: Any person responsible for paying any sum to a resident
transferor by way of consideration for transfer of an immovable property is liable to deduct tax at source.
Threshold Limit: No tax is deductible where the consideration paid or payable for the transfer of an
immovable property is less than ? 50 Lakhs. It is deductible only wherein the consideration of the property
exceeds or is equal to ? 50 Lakhs.
Time of deduction: Tax shall be deducted 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.
Rate of TDS: TDS to be deducted @ 1% of the sum paid. Condition of higher rate TDS if the deductee
(Seller) does not furnish PAN is not applicable because PAN of buyer as well as seller is mandatorily
furnished in Form 26QB.
On transfer of what type of property: Any immovable property (other than agricultural land in rural
area), wherein the consideration of the property exceeds or is equal to wherein the consideration of the
property exceeds or is equal to ? 50 Lakhs.
If TDS has deducted but not paid: In this case one and one-half percent (1.5%) for every month or part
of a month on the amount of such TDS from the date on which such TDS was deducted to the date on
which such TDS is actually paid.
If TDS is not deducted: In this case one percent (1%) for every month or part of a month on the amount
of such tax from the date on which such TDS was deductible to the date on which such TDS is deducted.
We would be glad to know your doubts or queries or clarification or suggestion. In case you need our
assistance in handling notice received, please feel free to contact us at : abhishek@arssolutions.co.in
+919022838615 www.arssolutions.co.in
The Author ‘Abhishek Ranjan Singh‘ is a Certified and authorized Tax Return Preparer of Income Tax
Department of India; currently he is Managing Director and Founder of ARS Solutions.
Disclaimer – Before making any decisions do consult the experts. Author does not take any responsibility for
misrepresentation or interpretation of act or rules. Neither the author nor the firm accepts any liability for the
loss or damage of any kind arising out of information in this document or for any action taken in reliance there
on.
5. TDS on sale of Immovable Property- Beware CPC TDS issuing intimation for late deposit of TDS
9. Procedure for TDS Payment (FORM 26QB) and Generation of Form 16B