Home » TDS » Section 194-IA : TDS on sale of immovable property : Compliance procedure

Section 194-IA : TDS on sale of immovable property : Compliance procedure

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 is applicable w.e.f  June 01, 2013  for sale of immovable property ( other than agricultural land ) where consideration is Rs. 50 Lacs and above. The purchaser is exempt from the obligation to obtain TAN, which is otherwise mandatory for all deductors.

CBDT has issued Notification No. 39/2013 on 31st May 2013 amending rules to simplify procedure for complying with provisions of this new section.

TDS-194-IA

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

Mandatory Electronic Payment

  • NSDL site has already provided a new link “TDS on sale of Property” under ePayment of Taxes to electronically deposit such TDS
  • It is mandatory to provide PAN of both transferor and transferee
  • Complete address of transferor and transferee is to be given
  • About property , complete address,  value consideration ,date of agreement  and whether payment made in lump sum or installment is also to be provided in the online form

Electronic Payment by deductors not having net-banking facility

  • Since Section 194-IA transactions will be one off and deductor may not have net-banking facility, an alternate has been provided.
  • The deductor has to fill the information online and then opt for e-tax payment on subsequent date option.
  • On completing the form, an acknowledgement will be generated.
  • The deductor can then visit a bank branch for payment, provide the acknowledgment number.
  • Bank will use TIN web site to retrieve payment information based on the acknowledgement number and then proceed to make electronic payment

What if there is an error in providing PAN details

  • Deductor must be very careful in filling up PAN details.
  • In case wrong PAN is entered, there is no facility of correcting the same online. The only option available is to approach the Assessing Officer or TDS-CPC

42 Comments

  1. Arun Kumar V says:

    Hi,

    I had made a property purchase for a sale consideration of Rs. 75,00,000/-. In the process of paying TDS online, I generated Form 26QB on the website of TIN NSDL for 1% of the sale consideration amount, which is Rs. 75,000/-. However, while making the payment through net banking, I had inadvertently added an extra ‘zero’ and made a payment to the tune of 10% [Rs. 7,50,000/-] instead of 1% [Rs. 75,000/-].

    Subsequently, I made a separate payment for 1% of the sale value [Rs. 75,000/-] and went ahead with the property registration.

    I am at my wits end trying to understand how to claim the refund of excess amount, which in my case is a huge 7.5Lakhs.

    Please help me on how to go about it as I am getting different responses from different people.

    Thanks.
    Arun

  2. Rahul says:

    Hi,
    I was going to buy a property and had deposited the 1% through ICICI Bank. However on the date of transfer, the seller refused to honor the sale agreement. Now that the deal is off, is there any possible way by which I can get the refund back.

  3. CCPL says:

    Dear Sir,
    I have been alloted government land of 10 acres worth 15 lakhs per acre ands the part sale consideration is been paid before (partial advance) g 31.03.2013 and subsequently an amount or Rs. 1,07,00,000/- (approx) has done (after 31.03.2013) i.e., september 2013 and interest amount of Rs. 70,000/- (approx) paid (after 31.03.2013) september 2013.
    1. Will I attract tds amount paid before 31.03.2013
    2. Will I attract tds amounts paid after 31.03.2013 (september 2013).
    3. Will I attract tds amount paid on interest (penalty for not making the payment in time)amount which is paid after 31.03.2013 (september 2013).
    4. Can I make the TDS payable after registration, if applicable after registration , subject to condition of making penalty.

    please confirm on priority, as registration is scheduled in a day or two.

    Regards
    CCPL

  4. Amol Phatak says:

    The property is owned by 3 people. so whether all 3 person’s PAN card is required. If yes, How to put the details of all the persons in Form 16 B. Thank you.

  5. Amol Phatak says:

    Please let me know whether any bank will help me for deducting TDS on immovable property as I am not having net-banking facility.

  6. Nelson says:

    I have purchased a flat with agreement value of 59 lacks I have already paid the white portion to the builder and he did not infor us regarding TDS payment so kindly help as what to do in such suituation what are the future consequences if the TDS is not paid who is liable in this case is it the builder or me.

    • Abhi says:

      Hi Nelson,

      AS per the Income Tax act, liability is on the buyer for paying tax. I am not sure about the future consequences but as per the law the liability will come on you as a buyer. You can negotiate with the builder on this.

      Take care!!

  7. Nelson says:

    I have purchased a flat with agreement value of 59 lacks I have already paid the white portion to the builder and he did not infor us regarding TDS payment so kindly help as what to do in such suituation what are the future consequences if the TDS is not paid.

  8. Payal Bhandari says:

    How are these provisions related to immovable property helpful in determent of tax avoidance?

  9. Pranav says:

    The section is applicable from 1st June’2013. However if someone has booked a flat in 2009 and signed the buyers agreement in 2009 and made regular payments in the construction linked plan and after June’2013 a payment of only 10 lacs is pending, is the buyer in this case also need to deduct TDS on the whole amount?

  10. carahul says:

    Sir,
    I had purchased a property from bank via auction in year 2007. Full payment of rs 51 lacs was made by me in year 2007 only. I had taken possession of property in 2007 only on the basis of sale letter issued by bank.
    But registry of the said property was made recently in September 2013. Value of registry was 188 Lacs according to the present guideline. Now the registrar is demanding the receipt of TDS payment on the value of registry for release of registry documents.
    Kindly advise, weather any TDS liability arises on us and if any then on which value.
    also advice on how to convince the registrar officer if no TDS liability is there.
    Kindly advice as soon as possible.

    Thank you

    • John says:

      You dont need to pay deposit any tds, because you paid full amount in 2007, the value of the property will be 51 lac, no matter its increased now.

  11. suryakant says:

    TDS @ 1% to be deducted by purchaser on Payment on Service Tax on sale of flat

  12. Prasad P Ghodekar says:

    from where should i get the answers of above all questions.

  13. drdaud says:

    i have booked a flat worth 49 lakhs and builder has applied a service tax, after which it cost more than 50 lakhs. my bank is not disbursing loan amount of 33 lakhs on downpayment scheme citing they need tds challan from the builder as the property cost above 50 laks. do service tax be included in evaluation of cost of property.

    • srinidhi says:

      I think service tax is not a consideration for the transfer of an immovable property. So service tax is to be excluded.

    • Rakesh says:

      Yes the section says immovable property costing more than Rs 50 lakh and service tax imposed is cost.

  14. Manish says:

    Four persons are purchasing a property for say Rs. 96.00 Lacs from one seller. Should the tax be deposited by a single challan or four seprate challans ?? Further, as observed, the Form 26QB does not accepts any value less than Rs. 50 Lacs. Then what shold the amount to be written at value of property column.

  15. Saugata Nad says:

    The Form 16B is still not avialable for download at the TRACES website even after 3 weeks of filing TDS online on sale of property at the NSDL website. Customer care of TRACES is not bothered to help the Customers and is not able to provide any sort of commitment as to when the Form 16B will be available for Download. Can somebody help in this.

  16. Joydeep Roy Chowdhury says:

    NRI Buyer of a Property in India pays Seller full amt vide ‘Agmt for Sale’ + subsequent Sale Deed. (a) is it now the onus of Seller to pay the 1% tax ? (b) what is the max time that he is allowed in this case ? Note : both parties have mentioned PAN nos respectively in the ‘Agmt for Sale’ & Sale Deed

  17. Suranjana says:

    I purchased a property for Rs 53 lacs after a down payment of 23 lacs. The registration has been done on 30 May 2013.
    Rest 30 lacs I am paying by loan. I would like to know if 1 % TDS is required for the 30 lac payment I am making after 1 June 2013 or should the registration date be considered for applicability of 1 % TDS.

  18. Abhishek says:

    I have deposited tax using Direct transfer mechanism. Can someone give me step by step details of downloading Form 16B?

  19. Vijay says:

    Sir,
    I am filling the Form26QB, need help to fill some fields. I have booked flat under CLP plan. Builder has put first demand of 15lakh. My Bank has disbursed one draft of Rs 14,85000 to the builder and one draft of Rs15000 to me. So i have to fill form 26QB for TDS of Rs15000. What should be the value of field.
    “Total Value of Consideration” . Is it going to be total value of property as mentioned in agreemnt or 15 lakh (just demand)
    “What should be “Payment Type” : Is it going to be i”nstallments” or “lumpsum”

  20. Ajish Koshy says:

    Can I make the payment on behalf of my father in law? He doesn’t have an internet banking account. His daughter has one. So can either (my sister in law or I) of us make the payment?

  21. suresh shah says:

    how can i receive form 16B

  22. No banker is accepting the tds along with cheque

  23. Prasad says:

    who’s pan i have to enter in payment challen?

  24. Rashmi says:

    Sir, Can you please tell me if I have already paid Rs. 35Lacs (out of total property value Rs. 65Lacs) before 1st June 2013 and I am going to pay rest Rs. 30 Lacs during July 2103. Will the TDS applicable on pending payment amount i.e. Rs. 30Lacs or on the whole amount i.e Rs. 65Lacs

    • Maiya M R says:

      its only on Rs.30.00 lakhs you need to deduct TDS and remmit

    • avinash says:

      Yes tds pro. will be applicable…becoz that consideration is more then 50 lacs

    • srinidhi says:

      Since section 194IA has come into effect w.e.f. 1-6-2013,even though the balance payment is Rs.30 lakhs but the consideration for the transfer of an immovable property is >50 lakhs ,TDS is applicable on RS. 65 lakhs

  25. Sandesh Gundecha says:

    Is tax deductible in case the total sale value is above Rs.50 lakhs but individually the amount payable by each joint holder is less than Rs.50 lakhs?

  26. saihu says:

    the returns that how will be in e return statement

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