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TDS on transfer of certain Immovable Properties (other than Agricultural Land) [Section 194-IA]

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

(A) Who is liable to Deduct TDS under Section 194-IA

Any person, being a transferee, responsible for paying (other than the person referred to in sect ion I94LA, relating to compensation in case of compulsory acquisition of property) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land) shall be liable to deduct tax.

(B) Meaning of consideration for transfer of any immovable property

Consideration for transfer of any immovable property" shall include all charges of the nature of—

(i)         club membership fee,

(ii)        car parking fee,

(iii)       electricity or water facility fee,

(iv)       maintenance fee,

(v)        advance fee or

(vi)     any other charges of similar nature, which are incidental to transfer of the immovable property.

(C) When is the TDS to be Deducted U/s 194-IA

Tax is to be deducted:

(a) at the time of credit of such sum to the account of the transferor, or

(b) 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.

(D) Rate of TDS

The rates of TDS in case of transfer of immovable property shall be 1%.

Notes :

1.       No surcharge or health and education cess shall be added to the above rates. Hence, tax will be deducted at source at the basic rate.

2.         The rate of TDS will be 20% in all cases, if PAN is not quoted.

(E)  TDS not to be Deducted in case of Transfer of certain Immovable Property

In the following cases tax is not to be deducted at source under section 194-IA:

1.         The immovable property transferred is a rural agricultural land.

2.         The immovable property has been compulsory acquired under any law.

3.       The total amount of consideration for the transfer of immovable property is less than
Rs. 50 Lakh.

(F)  Procedure of Deposit of TDS (Tax Deducted at Source) U/s 194-IA

Notification No. 39/2013, dated 31.5.2013 has prescribed the procedure for deposit of tax deducted at source, which is as under:

(1)     Any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of 30 days w.e.f. 1.6.2016 (earlier it was 7 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.

(2)     The tax shall be deposited by remitting it electronically within 30 days w.e.f. 1.6.2016 (earlier it was 7 days) from the end of month in which deduction is made into the Reserve Bank of India or the State Bank of India or any authorised bank.

(3)     The Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) shall specify the procedure, formats and standards for the purposes of remitting the amount electronically to the Reserve Bank of India or the State Bank of India or any authorised bank and shall be responsible for the day-to-day dministration in relation to the remitting of the amount electronically in the manner so specified

(4)     Online payment of TDS is mandatory. Online payment of challan is available on TIN NSDL website.

(5)     Both transferee and transferor must have Permanent Account Number (PAN). Transferee is not required to hold/obtain TAN for payment of TDS.

(G) Form, Time Limit and Procedure for issue of TDS certificate of Deduction of Tax U/s 194-IA [Rule 31(3A)]

The person responsible for deduction of tax under section 194-IA shall furnish the certificate of deduction of tax at source in Form No.16B to the payee within 15 days from the due date for furnishing the challan-c urn-statement in Form No.26QB under rule 31 A after generating and downloading the same from the web portal specified by the Principal Director General or Director General of Income-tax (System) or the person authorised by him.

The Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) shall specify the procedure, formats and standards for the purposes of generation and download of certificates and shall be responsible for the day-to-day administration in relation to the generation and download of certificates from the web portal specified by him or the person authorised by him.

(H) Quarterly Statement to be filed in case of TDS

Every person responsible for deduction of tax under section 194-IA shall furnish to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) or Director General of Income- tax (Systems) a challan-cum-statement in Form No. 26QB electronically in accordance with the procedures, formats and standards specified by Principal Director General of System or Director General of System within 30 days from the end of the month in which the deduction is made.

 

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