Introduction
This section
is introduced to cover high value property transactions under Tax net.This
section intends to cover the Gross receipts/Sale consideration received by
Seller on sale of an immoveable property. In this case, TDS is to be deduced by
the person paying the above consideration i.e. buyer.
Let’s
understand Where, When and How much
TDS is to deducted in this section.
Where
is TDS required to be deducted under Section 194IA?
TDS is to be
deducted if all of the following conditions are met:-
1.
Amount
of *Sale Consideration is Rs. 50 lakhs or more
2.
Property
being sold is Immoveable property other than RURAL agricultural land.
3.
Seller
of property is Resident of India
4.
If
property is not being compulsorily acquired under any law (which is governed by
Section 194LA separately)
*Sale
Consideration in context of this section includes charges of all nature of club
membership fees, car parking fees, electricity or water fees, maintenance fees,
advance fees or any other charges of similar nature which are incidental to
transfer of immovable property.
When
is TDS to be deducted?
TDS under
Section 194IA is to be deducted at earliest of the following:-
·
Credit
of such sum in account of transferor or
·
Payment
of such sum in cash or by cheque or by draft or by any other mode
How
much TDS is to be deducted?
TDS is to be
deducted @ 1% of Sale consideration received
The above
rate of 1% was amended to 0.75% for the period 14.05.2020 to 31.03.2021 due to
COVID-19(section 197B)
Non
Applicability of Section 203A
Unlike other
sections of TDS, under this section, The buyer (doing deduction of TDS) is not
required to obtain TAN to deduct and deposit TDS under this section. Under this
section, he can deposit TDS to Government’s Account without using TAN number
following few simple steps explained below.
Steps
to deposit tax deducted under Section 194IA
The buyer of
property needs to file Form 26QB which is used to deposit tax deducted under
this section. The buyer of the property needs to follow below mentioned steps
in order to deposit tax deducted from sale consideration to be paid to seller.
Step 1 :- The
buyer has to go to:-
https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp .
Step 2:- Click on Form 26QB and
select 0020 in case one is corporate payer and 0021 in case one is
non-corporate payer and then necessary details need to be filled out.
Step 3:-
Selecting mode of payment-Here buyer can either choose e-tax payment immediately
option and thus can pay using Netbanking facility or he can choose e-tax
payment on the subsequent date option and thus can generate challan and then
pay manually through visiting a bank.
Step 4:- Go
to Traces Website:-
·
Visit
https://www.tdscpc.gov.in/app/tapreg1.xhtml in case of First time user to
register and then register by filling out necessary details.
·
Visit
https://www.tdscpc.gov.in/app/login.xhtml in case already registered and Login
using credentials
Step 5:- Once
registered/Logged in, One can download Form 16B which is a TDS certificate to
be issued by Buyer to Seller as proof of deduction and deposit of TDS so that
seller can claim it in his Income tax return. Form 16B is available around 7
days after the tax has been duly deposited.
