Section 194IA - TDS on payment on transfer of certain immovable property - Income Tax - Ready Reckoner - Income Tax

Section 194IA : TDS ON PAYMENT ON TRANSFER OF CERTAIN IMMOVABLE PROPERTY 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 be liable to deduct tax. w.e.f. 01.10.2024 where there is more than one transferor or transferee in respect of any immovable property, then the consideration shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property. [Inserted vide Finance (No. 2) Act, 2024 ] Time of Deduction At the time of credit or payment, whichever is earlier. Rate of TDS 1% of the total consideration for transfer of immovable property Amendment made by finance act 2022, w.e.f. 1-4-2022 TDS on sale of immovable property, at the rate of 1% of - Such sum paid or credited to the resident or - the stamp duty value of such property whichever is higher. Furnishing TDs Return Every person shall furnish a challan-cum-statement within 30 days from the end of the month in which the deduction is made. Such statement file in Form 26QB electronically in accordance with the procedures, formats and standards specified under rule 31A(5) . [ Rule 31A(4A) ] Furnishing TDS Certificate Every person shall furnish certificate for deduction of tax in Form No. 16B to the payee within 15 days from the due date of furnishing statement in Form 26QB . [ Rule 31(3A) ] Notes: Every person is liable to deduct tax at source @ 1% on payment made for purchase of immovable property to a person resident in India, except for: (i) rural agricultural land (which is not coming in definition of capital asset) (ii) the immovable property has been compulsory acquired under any law. (ii) where the sale consideration for the property is less than 50 lakhs. Therefore, if the immovable property is purchased from a non-resident person for any value, no TDS is required to be deducted under section 194IA. However, TDS shall be deducted under section 195 . It is not necessary that the land or building should be situated in India. If any person is purchasing property outside India from a person resident in India, he is liable to deduct tax at source on sale consideration @ 1%. In case section 194-IA is attracted then the purchaser isn t required to obtain TAN , i.e. Tax Deduction Account Number i.e. section 203A is not applicable. Every person who is purchasing property of ₹ 50 lakhs or more have to deduct TDS @ 1% of the payment made to the seller. In case the seller does not have PAN or PAN is inoperative or PAN does not link with Aadhar, then instead of 1%, TDS will be applicable @ 20% because of section 206AA of the Income Tax Act, 1961. [ Read Rule 14AAA ] In the case of property whose sale price is ₹ 50 lakhs or more and in the event part payment is being made for the purchase, then such TDS would be required to be deducted on every part payment of consideration and not at the time of final tranche of payment. If sellers jointly own a property and sells for a total consideration of ₹ 50 lakh or more, then section 194-IA is attracted even if each co-owner s consideration is less than 50 lakhs. TDS is required to be deducted irrespective of the fact that immovable property is held as capital asset or stock-in-trade by the buyer and seller. In case immovable property ( other than agricultural land which is not capital asset ) is acquired under any law in force, the provisions of section 19LA shall apply and provisions of section 194-IA is not applicable.