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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
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