Section 194-IA : TDS on purchase of Immovable Properties

Tax Deduction at Source (TDS) on transfer of certain immovable properties (other than agricultural land) for value Exceeding Rs.50 Lakhs.

The Finance Bill 2013 has introduced a new section 194-IA providing for TDS @ 1% to be deducted by purchaser. In case valid PAN of seller is not available , tax deduction will be at higher rate of 20%. This amendment is effective from 1st June, 2013. 

For reducing the further compliance burden on the transferee, it is also provided that a simple one 

page challan for payment of TDS would be provided containing details (including PAN) of transferor and transferee  and also certain details of the property. The transferee would not be required to obtain any Tax Deduction and Collection Account Number (TAN) or to furnish any TDS statement as this would be mostly a one-time transaction. 

The transferor would get credit of TDS like any other pre-paid taxes on the basis of information furnished by the transferee in the challan of payment of TDS. 

The New Payment Challan for TDS requires the Property Purchaser to Furnish following details in the form for payment of TDS :- 

·         Permanent Account No. (PAN) of Transferee (Payer/Buyer) 

·         Permanent Account No. (PAN) of Transferor (Payee/Seller) 

·         Category of PAN of Transferee 

·         Category of PAN of Transferor 

·         Full Name of the Transferee 

·         Full Name of the Transferor 

·         Complete Address of the Transferee 

·         Complete Address of the Transferor 

·         Complete Address of the Property Transferred 

·         Details of amount paid/Credited 

Deposit of tax

Any tax deducted under section 194-IA will be

·         Deposited within 7 days from the end of month in which tax was deducted

·         Deposited by way of Challan-cums-statement in Form 26QB

·         Deposited electronically into RBI/SBI or any authorized bank. Director General of income-tax (Systems) will specify formats , standards and procedure for such electronic remittance

TDS Certificate

·         TDS Certificate in respect deduction under section 194-IA will be issued by deductor in Form No 16B

·         Form 16B has to be issued within 15 days from the due date of depositing tax

·         Form 16B will have to be downloaded from income tax web portal.