Section 194-IA – TDS on Purchase of Immovable Property

Section 194-IA – TDS on Purchase of Immovable Property

1. 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 (other than agricultural land in rural area) is liable to deduct tax at source u/s 194-IA.

2. Time of deduction :-

At the time of payment or credit, whichever is earlier.

3. Rate of TDS :-

TDS to be deducted @ 1% of the sum paid. However, TDS needs to be deducted @ 20%, if the deductee does not furnish PAN.

4. Threshold Limit :-

No tax is deductible where the consideration paid or payable for the transfer of an immovable property is less than Rs. 50,00,000/-.

5. Other points:-

Provisions of TAN as prescribed u/s 203A shall not apply in respect of tax deducted u/s 194-IA.
Immovable property means any land, building or part of building. Such property may be situated in India or outside India.

TDS provisions of section 194-IA shall apply only if the transferor is resident in India.

 TDS provisions of section 194-IA shall not apply if a person acquires rural agricultural land in India.

6. Online Payment of TDS through challan cum statement on Form 26QB through NSDL Website:-

Tax so deducted should be deposited to the Government Account through any of the authorized bank branches using the e-Tax payment option available at NSDL E-payment within a period of seven 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.

                                                                             Steps to Pay Tax Online

Log on to NSDL-TIN website (www.tin-nsdl.com) or Alternatively person seeking payment of TDS on sale of Property can also use the following link - https://onlineservices.tin.nsdl.com/etaxnew/tdsnontds.jsp
Under TDS on sale of property, click on the option “Online form for furnishing TDS on property”.

1. Select Form for Payment of TDS on purchase of Property- Click on the option “TDS on sale of property’.
2. Select Financial Year from the drop down for which payment is to be done.
3. Select Tax applicable for which payment is to be done.
4. Mention PAN of Transferee/Buyer
5. Mention PAN of Transferor/Seller
6. Re-enter PAN of Transferee/Buyer
7. Re-enter PAN of Transferor/Seller
8. Provide Complete address of Transferee/Buyer
9. Provide Complete address of Transferor/Seller
10. Provide Complete address of Property transferred
11. Mention the date of Agreement/Booking of property
12. Mention the Total value of consideration (Property Value)
13. Mention if the above payment is done in Lump sum or in Installments
14. Please select the amount paid/credited (Enter the amount paid to the Transferor/Seller)
15. Please enter the TDS rate (Tax rate at which the TDS was deducted by the purchaser at the time of purchase of the property)
16. Please enter the TDS amount to be paid (amount deducted by the purchaser at the time of purchase of the property)
17. On proceed, confirmation page is displayed to verify the details entered
18. If all the above detail including the name displayed (as per ITD) is correct then, click on “SUBMIT” button
19. In case you have made a mistake in data entry, click on “EDIT” to correct the same.
20. On confirmation, nine digit alpha numeric Acknowledgment number would be generated
21. To do the required TDS payment, please click on ‘Submit to the Bank’ button
22. On clicking on Submit to the Bank, deductor will have to login to the net-banking site with the user ID/ password provided by the bank for net-banking purpose.
23. On successful login, enter payment details at the bank site.
24. On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.

Disclaimer: The views expressed in this lesson are for information purposes only and do not construe to be any investment, legal or taxation advice. The lesson is a conceptual representation and may not include several nuances that are associated and vital. The purpose of this lesson is to clarify the basics of the concept so that readers at large can relate and thereby take more interest in the product / concept. In a nutshell, these learnings should be seen from the perspective of it being a primer on financial concepts. The contents are topical in nature and held true at the time of creation of the lesson. This is not indicative of future market trends, nor is Master Mind Financial Advisory attempting to predict the same. Reprinting any part of this material will be at your own risk. Master Mind Financial Advisory will not be liable for the consequences of such action.