TDS on Sale of Property-Section 194IA

Section 194IA : TDS on Sale of Property

TDS should be deducted on purchase of a Immovable Property from a Resident Seller (except Rural Agricultural Land) having value 50 lakhs or more.

• The rate of TDS is 1%
• Sale Consideration shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property;
• TDS applicable on Sale Consideration or Stamp duty value whichever is higher
• The Buyer need not apply for TAN to deposit this TDS
• Deposit the TDS by using PAN
• A separate form 26QB has to be filed. It is a return cum challan. Following details of buyer, seller and Property purchased are to be filled in this form :
  • Buyer Name, PAN, Current address with Pincode, Mobile and Email Id.
  • Seller Name, PAN, Current address with Pincode, Mobile and Email Id.
  • Complete address of Property purchased along with Actual Sale Value, Stamp Duty Value, Date of Purchase, Date of Tax Deduction, Date of payment made to Seller
• Due date of TDS payment is 30days from the end of month of purchase (Rule 30(2A))
• As this is a Return cum Challan, any delay in filing 26QB attracts a late fees of Rs. 200 per day (Maximum upto TDS amount)
• Once 26QB form is filed by the buyer, the seller gets the credit of the Tax which reflects in his 26AS
• The buyer needs to create a Tax payer login on Traces site and issue a Form 16B to the seller
• Time of TDS deduction:
  • The TDS to be deducted at the time of payment or credit(Purchase) whichever is earlier

Section 194-IA of the Income Tax Act:- Payment on transfer of certain immovable property other than agricultural land

(1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, 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, deduct an amount equal to one per cent of such sum or the stamp duty value of such property, whichever is higher, as income-tax thereon.

(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, are both, less than fifty lakh rupees.

(3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

Explanation.—For the purposes of this section,—

(a)  “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;

(aa) “consideration for transfer of any immovable property” shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property;

(b)  “immovable property” means any land (other than agricultural land) or any building or part of a building;

(c)  “stamp duty value” shall have the same meaning as assigned to it in clause (f) of the Explanation to clause (vii) of sub-section (2) of section 56.