SECTION 194IA: TDS ON PAYMENT ON TRANSFER OF CERTAIN IMMOVABLE PROPERTY.( INSERTED BY FINANCE ACT 2013, APPLICABLE W.E.F 1ST JUNE 2013.-
QUICK REFERENCE:- SEC.194IA TDS ON TRANSFER OF CERTAIN IMMOVABLE PROPERTY.
| S.NO. | PARTICULARS | REQUIREMENT |
| 1 | SCOPE OF SECTION 194IA | Cover all transfer of immovable property if value of consideration is 50 lacs or more except Rural Agricultural land and & transaction covered under section 194LA. |
| 2. | Person liable to deduct Tax | Buyer of property |
| 3. | When TDS will be deducted | date of crdit or date of payment, whichever is earlier. |
| 4. | Rate of TDS | 1% |
| 5. | Whether TAN required | No, Only PAN is required of both buyer and seller. |
| 6 | Retun of TDS | In Form No. 26QB challan cum statement to be filled electronically |
| 7. | Due date of furnishing return | By the 7th of the month from the end of the month in which TDS is deducted. |
| 8 | Due date of deposit TDS amount | Either at the time of filling form26QB or within 7 days from the date of filling 26QB |
| 9. | Where & How to deposit TDS | TDS deposited through filling of challan 26QB either by self net banking or through designated bank by visiting the income tax website- https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp |
| 10 | Issuance of certificate | In Form No. 16B |
| 11 | Due date of issue of form 16B | Within 15 days from due date of filling of statement under section 194IA. |
Provision of Section 194IA: can be explained in FAQ Mode .
- 1. Who is required to Deduct Tax at Source.
Ans: Any person being a Transferee i.e. Buyer of property is required to deduct tax .
Explanation : Any person means all the person whether individual, HUF, Company , firm, Aop/BOI etc.
2 When tax is to be deducted,
Ans: Tax Is deducted at the time of credit or payment made , whichever is earlier.
Explanation : Credit refers to the date of transaction
Explanation: Payment include consideration discharged by way of cash or cheque or DD or any other mode.
Explanation: Thus, even at the time of giving earnest money or advance money or installment money , provision of this section 194IA will attract and Buyer is required to deduct tax and deposit to same .
Suppose value of property is Rs. 60 Lac and buyer pay 100000/-advance payment and rest in installment. The buyer is required to deduct tax on each payment.
Example: Suppose if Real Estate Agent Receive Immovable Property against his commission for selling of flat of Developer, then this case will be covered u/s 194iA, if title of property is transferred from developer to agents and here Agent is required to Deduct Tax @1% on the value of consideration.
3 At what amount tax shall be deducted.
Ans: Tax shall be deducted on amount of consideration paid for transfer of immovable property ,if value of consideration for transfer of immovable property is Rs 50 Lacs or More.
Example: if the sale value of property is 49.99 Lacs, no Tds is required to be deducted. However if value of property is 60 lacs, then TDS will be deducted on the entire amount , say Rs.60 Lacs.
4.At what rate tax is required to be deducted.
Ans. Tax deducted @1%. However if PAN is not provided by the Seller than Tds Will be deducted at the rate of 20%.
5.What is immovable Property for the purpose of TDS.
ans. Immovable property means any Land ( Other than Rural Agriculture Land),or Building or any part of Building.
6. When Tax is to be deposited.
Ans. Tax is to be deposited by 7th of month following the month in which tax is deductd.
7.When TDS certificate is required to be issued.
Ans. TDS certificate in Form No. 16B IS REQUIRED TO BE ISSUED WITHIN 15TH DAYS FROM THE DUE DATE OF FILLING OF RETURN.
8. Whether the provision of section 194IA apply if property has been financed through Bank Loan.
Ans. Yes. In such a case buyer will have to ensure either he himself or the bank deduct tax before disbursing the loan to the Seller.
9. Whether the provision of Sec.194IA apply, if buyer bought an under construction property prior to the provision coming into effect.
Ans .Yes, if buyer has to make balance payment after june 1st 2013 .( as per clarification issued by Department.).
10.Whether the buyer is required to obtain TAN no . to deposit of tax and filling of return.
Ans. No, buyer is neither required to obtain TAN No. for deduction & deposit of Tax., and nor required to file TDS Return if buyer is not subject to Tax Audit.
10. How to make payment of TDS.
Ans.TDS can be Paid by the buyer either online or duly filled TDS Challan Form( New Challan Issued by department Specifically for Deposit of TDS on sale of immovable property- see Format in can be deposited in any authorized Bank.
11. Who is required to deduct tax if transaction for sale of property is routed through intermediary.
Ans. The responsibility of ultimate deduction of TDS is of Buyer. In case of property sell through Agent, the buyer is required to deduct Tax because buyer make payment ultimately to actual owner ie. Seller. And TDS certificate will be issued in the Name of Seller, because agent has no title of Property.
Example: Suppose ABC Company enter into contract with B to sell the property on his behalf. B sell property to C on behalf of ABC. In this case C will deduct the TDS and certificate will be issued by c in the name of ABC.
12. WHETHER BUYER IS REQUIRED TO OBTAIN TAN FOR DEDUCTION OF TDS.
ANS: No, Tan is not required for buyer and seller. PAN number of both Buyer and Seller is sufficient to comply the requirement of Law.
13. WHETHER THE BUYER/DEDUCTOR IS REQUIRED TO FURNISH RETURN OF TAX DEDUCTED U/S 194IA.
ANS: Yes, Deductor is required to furnish the Statement in Form No. 26QB by the 7th of the month following the month in which TDS is deducted.- form 26Qb challan cum statement
CA.M.S.ROY 
Sir,
We have purchased a villa property and we are having two separate agreements for land and construction.
With ABC properties for Land area worth 41 lakhs
With XYZ developers for construction & development worth 35 lakhs
Will this also attract 1% TDS deduction at each stage of payment.
No, since two agreement entered with different person.
I have entered in deal where the builder is asking me to have two agreement one for sale of portion of land in building and one is development agreement Total deal is for 65 Lacs{ 10 lacs for land portion + 55 lacs for development agreement do i need to deduction TDS under section 194IA
Hi,
we have deducted TDS u/s 194IA but by mistake we deposited (Payment challan) the same u/s 194C
Can this be adjusted ??
You can adjust the same or write the letter to tds department for the same.
Mr Roy, first of all thanks for helping everyone, you are doing a great service !
in the month of April of fy15-16 we sold a house at Rs 60 lakhs (Mumbai). An amount of Rs 60,000 was desposited as a TDS by the purchaser of the house.
I have had a look at form 26AS and I am able to see this amount of Rs 60,000 under
” Part A2- Details at tax deducted at the source on sale of immovable property (for seller) ”
1. can I claim this amount of 60,000 as a refund while filing tax return for AY 16-17?
2. If yes in the ITR-1 form, in the tax details form, i am required to fill TAN number of deductee in “Sch TDS2 – Details of Tax Deducted at Source from Income OTHER THAN Salary” and there is no TAN number information in ” Part A2- Details at tax deducted at the source on sale of immovable property (for seller) ”
How do I proceed, any insight is greatly appreciated!!
Sir,
My client purchased an immovable property on 23/10/2013 for Rs. 60 lakhs He didn’t deducted TDS on said transaction. Now he got a notice to deduct and pay tds in form 26QB. As seen by me the said seller of the property has shown the transaction in his return of income filed on 23/11/2014 and also given us a certificate u/s 201(1) of a CA to that effect.
My query is – are we still liable to deduct and deposit the tds amount on the said transaction or should we only furnish Form 26A and pay interest on tds amount for 13 months. If we have to pay only interest then which challan should we use to pay interest only and not tds amount because in 26QB its not taking only interest its showing that we should also state the amount of tds.
Please advice on this topic. Waiting for your reply.
Thanks in advance.
Plz go to nsdl site and click on the demand payment
Pay the interst amount and enclosed with ca certificate and submit to it authority
For payment of Interest u/s.201(1A) if we click on Demand Payment Challan it asks for Ack.No. also which is a compulsory field. However since no 26QB is filed is such case there is no acknowledgment number available. Should interest be deposited by regular challan no.280 selecting self asstt.
yes
Sir,
I have received notice from IT department regarding non filing of 26QB (TDS OF 1%). The property I bought was worth 60 Lacs and date of transaction is april 2013. I have paid full amount and since the rule came into effect from 01st June 2013, Will I be penalised?
No if full payment is made by you before june 2013
Thnx
I was the seller & sold the property in 2014 & paid the TDS , now i need to claim it back in itr , how to do it & where to mention it.
Claim the tds by filling the details in tax deducted Coloumn.
Further see the corresponding income in capital gains colomn if it is capital asset for u.
Thnx
Hi Roy,
Do we show the 1 %TDS on property sale under ‘advance tAx paid ‘ or Self assessment tax paid” in the ITR as there is no TAN no. of the deductor.
PLZ show under TDS
Dear Sir
I made a booking of an under construction apartment and then cancelled the booking. I have got the refund from the builder but how to get a refund of the TDS deposited by me. Please guide.
Thank you
Please fill the tds refund application form in ur jurisdiction to get the refund of tds deposited by u mentioning the reason that deal got cancelled
I paid earnest money of 7L to builder on 17th April 2015 and 21L to builder on 29th April 2015 towards my first 20% of the booking/agreement payment. Now I realized that I should have deducted the TDS by 7th of May. I haven’t. Say if I deduct it today on 16th May 2015. So I have to pay TDS with following penalties:
a) Rs. 200 per day from 8th of May: i.e. Rs. 9 * 200 = 1800.
b) 1.5% penalty/interest for two months on the TDS amount even though there is a delay of 9 days only.
( Q1: is there any other penalty/interest that I need to pay )
Q2: Can I club two payments of 7L and 14L into one and pay Rs. 200 per day fee as only one penalty. Instead of 9*200 for 7L and 9*200 for 14L ?
Kindly resolve my queries as quickly as possible.
Thanks,
Club 2 payment into 1 .
Thanks! :). You are quick.
hi mr roy ,
how can i raise the request for rectification ? Will this provide the correction and levy from paying the TDS fees + interest to IT department
Hi,
My wife and I are looking to buy out a property and have few queries on section 191-IA. Can you please help us with the below?
Brief about a deal
1. There is a single seller and two buyers -Let’s called them Husband and Wife.
2. Payment Schedule: Total amount: 60 Lacs which is divided in two parts: Own Contribution: 12 Lacs (20% of agreement value) and Bank Contribution: 48 Lacs (80% of agreement value)
3. Own Contribution will further divide into two parts: RS 11,40,000 – Payment to Seller directly
and RS 60,000 – Payment to IT department for account of 1% TDS on agreement value (i.e. 60 Lacs)
4. Different Installments:
• Issued a cheque of RS 1,40,000 last week (which is not debited yet) as a token by Husband.
• Will be issuing another cheque of RS 4,30,000 next week from Husband’s account.
• Will be issuing another cheque of RS 5,70,000 next week from Wife’s account.
• Husband and Wife, both are paying the amount in equally (50% share).
• So by next week, we will be releasing RS 11,40,000 to him and will go for registration.
• Post registration, bank will issue a cheque of RS 48 Lacs
4. While googling, I read that both the buyers have to fill separate 26QB forms to make unique buyer-seller combination and we also have to deduct tax within 7 days from cheque issuing date.
Now the questions are:
1. Even though payments from Husband’s account are in installments, can Husband entitled fill a single 26QB form by clubbing both the entries (RS 1,40,000 and RS 4,30,000)?
2. Who has to fill form 26QB at the time of disbursement? Is it a bank? If not the bank then, should it be a Wife or a Husband or they both (by dividing amount to 24-24 Lacs) have to pay?
3. Will the section “Property Details” remain unchanged for each filling? Especially, “Total Value of Consideration (Property Value)*” field? Should Husband and Wife both write 60 Lacs, each time for different installments or it should be the same amount as installment?
4. There is a BIG confusion on “Amount Paid/Credited” and “Property Value”. At the end, we are going to give a seller a sum of RS 59,40,000 (99% of property value) and RS 60,000 (1% of property value) to income tax department. If we enter RS 59,40,000 and pay 1% tax on it, the final TDS amount comes to RS 59,400 only. How and where to adjust RS 600 to make the sum back to 60 Lacs.
5. After spending lot amount of time, I concluded on below, please confirm since the amount paid value which both Husband and Wife will be filling in respective form 26QB and actual amount paid by them via cheque are different (for example Amt Paid is 1,41,415 in form 26 QB and actual cheque given to the seller of RS 1,40,000):
• At the minimum, we will have to fill 4 different 26QB forms as below.
• I played with “Total Value of Consideration (Property Value)*” and Amt Paid/Credited fields for each 26QB submission to adjust figures to matches with:
o Total cost of property
o Total amount actually needs to pay to Seller
o Total amount actually needs to pay to Income tax dept
Prop Value Amt Paid 1% TDS Actual Amt Issue to Seller Creditor/Form 26QB Filler
141415 141415 1415 140000 Myself
434342 434342 4343 430000 MySelf
575758 575758 5758 570000 MyWife
4848485 4848485 48485 4800000 Bank
Total 6000000 6000000 60001 5940000
Very good article. I have 5 simple questions:
1. I am buying a property for 60L. The property will be jointly owned by me and my wife. Seller is only one person. Do i need to submit 2 separate TDS (one for each for me and my wife) or just one TDS on my name is sufficient. If i need to pay 2 TDS, can it be for 0.5% each i.e, 30 K from me to Govt on behalf of seller and 30 K from my wife to Govt on behalf of seller.
2. Date of Agreement/Booking : Will this be date of registration (future date) or date of sale agreement (as part of which I paid 5 Lacs).
3. I paid 5Lacs as advance and made a sale agreement. I am planning to pay 25L as bank loan and remaining (30 minus TDS amount) as DD/Check. Do I need to put the “Payment Type” as “Installment” or “lump sum” ?
4. For “Amount Paid/Credited” Section: how much should I enter ? Is it 5 Lac, I paid as Advance, 60 Lac the total value of the deal or 59, 40,000/- which is sale value minus TDS amount.
5. “Basic Tax (TDS Amount to be paid)” should be the amount I am paying as TDS, right ? In this case, if I pay in one TDS form, 60,000. If I pay in 2 forms, it should be 30000 each, right ?
Thanks and Regards,
Ram
Just file one form but mention the name of both applicant buyer
Dear Sir
I made a booking of an under construction apartment and then cancelled the booking. I have got the refund from the builder but how to get a refund of the TDS deposited by me. Please guide.
Thank you
Date of sale agreement
Lumsump
5 lac
Some queries on aspects related to sec 194IA ………….
• Whether we need to deduct TDS on each payout or only when the 50 lacs threshold has been crossed?
• Is the applicability of TDS @1% w.r.t. property value being >50 lacs or is it w.r.t. individual holding value exceeding 50 lacs?
• Form 26QB: Do I select 0020 or 0021? Buyer is individual & seller is Pvt Ltd Co.
• Within how many days from the payment to the builder is the TDS amount to be deposited?
• Are advance maintenance & development charges payable to builder to be added to value for calculating the 1% TDS? {In my view ans is NO, since these are not paid as consideration towards transfer of immovable property}
• Would sec 194IA be applicable on the portion of VAT / ST payable / paid to the builder?
Thanking you in advance for the inputs.
If value of property exceed 50 lacs , we need to deduct tds on each payout.
The threshold limit of 50 lacs is property-wise , not owner wise.
if buyer is co.then 0020, otherwise 21.
Within 7 days from the end of the month in which tds deducted. TDS can be deposited either at the time of filling of 26qb or later through challan.
TDS will be deducted on total value excluding servie tax.
EDC, IDC form part of consideration.
Sir, is this provistion of TDS @1% attract on Joint Development Agreement?
No,it is only the arrangement between developer nd land owner.Provided if there is no transfer of property.
Hi…I have bought a house above Rs 50 lacs and paid TDS withiin 15 days and have already issued form 16B to seller…Now while filling income tax returns this amount is appearing in my TDS list in 26as and on calculation on payable tax it shows a net refund of same amount…
is this how it is supposed to be? Am I supposed to get a refund of this TDS?
No you can not get refund of tds unless deal is cancelled.tds refund can be claimed by seller because it belongs to his income.
Its ok seller would claim the tds but what should we do if tax refundable is coming in our ITR form and how to proceed further.
please attach the scan copy of 26AS to see the matter.
I am buyer of property and have paid 1% TDS. It is getting reflected in Form 26 AS. Now while filing ITR do i have to mention it ? If yes, where should i mention it
No , you need to consider this amount in itr return because you are paid tax on behalf of seller and seller only take tds credit of such amount, because income accrues to seller on which tds deducted by buyer.
Dear Mr. Roy, I have a question related to the TDS deducted by me (buyer). I have deposited the TDS as per payments done from 1-Jun-2013 till 31-Mar-2014. Can I include the TDS amount deposited with govt. as self assessment tax and claim during filing of my IT returns for AY14-15?
If yes, does it mean that if there is no tax balance as per form 16, then TDS amount (1% of property consideration value) will be refunded to me ?
Tds is deducted by you with the name of seller and deposited by you in govt a/c.
You can not claim this amount as a refund because it is the tax amount of seller paid by you on his behalf.
This money ultimately belong to seller. and seller can take TDS refund if tax payable is nil.
Hi Mr Roy ,
I have included the TDS in my ITR , ITD gave me the intimation with TDS as 0 . That’s correct as per the above statement . Now ITD issued me a notice of asking the TDS amount again with interest (due to late fee) , please let me know what should I do ?
I have already paid the TDS , though it was credit of seller , but what can I do to inform the ITD that this was just a mistake that I added the TDS in my ITR .
Hi mr himanshu
thanks for asking the query
Tds deducted on property is credit of seller that he can claimed by filling the details in itr
Buyer need not to show such tds in his return
You should either file the revised return if original return filled on due date
Or file rectificaton request by login through your account to cpc banguluru
Hi Mr Roy , Please tell me the detailed procedure for filing the revised return , if I will file revisied return then what fields do i need to show in my return . If I will file the revised return , then it will be counted as late filing or not ? How can I raise the rectification request ? Also , I have received the notic on 27th March , Do I need to submit this fees with rectification ? THANKS & REGARDS
HIMANSHU CHAUHAN EMAIL: chauhanhimanshu92@yahoo.in
In case of purchasing from Govt bank,TDS to be deducted or not…?
yes ,to be deducted
yes any person being a transferee as per section 194IA. so you need to deduct tds.
Can builder or Seller of Property deduct or deposit TDS ?
the ultimate liablity of deduction and deposit of tax on buyer. it depend on the buyer which types of arrangement is made with seller.
if seller deduct tax itself, then take the proof of deposit and copy of form 26qb ensure it is filled with your name as a buyer.
Dear Sir can we use form 26QB to deposit TDS on property purchased from NRI seller
no, sec 194ia not applicable for deal with non-resident
Hi, A purchased a property for 70L and signed 2 agreements – one land sale agreement for 30L and another construction agreement for 40L. During registration of the property, the sale deed value based on the guidance value is coming around 48L. Is 1% TDS deductible in this scenario? Thanks for your help.
If A buys underconstruction property from builder for sum of 150lac and pays 50lac towards it without agreement and then makes agreement with builder with balance payment of 100lac. Then A sells property to B for consideration of 200lac now B will have to pay A his initial 50 and his profit 50 i.e 100lac and to builder remaining 100lac.in this case what is TDS libility on A and B
In this situation, b is required to deduct tax @1% on 200 lacs with the name of A, and A is also required to deduct tax @1% on 50 Lacs at the time of payment and 100 Lacs when payment is indirectly made by B to builder.
Please provide the information-
. where A has legal title or not for transfer the property.
Whether subsequent agreement will be entered between A& B or B& A & builder
This is very useful, in briefing the process. I still had one niggling question. Suppose as an ex: the agreed upon property value is 88Lacs, on top of paying this value to seller buyer has to pay 88k as tax to govt providing reqd forms. Can seller use 16B form and claim the tax while filing ROI? Does it mean that additional money which I as a buyer has paid as tax, is actually claimable by seller? So in all does he get 88,88,000 for a property of 88L??
You have to pay as a buyer Net of TDS Amount ie. 88Lacs – 1% Tds, Seller will claim TDS by filling the ITR.
Buyer paid TDS out of total seller consideration payable to Seller.
so seller consideration in any case can not exceeed 88lacs.
Can Seller of the property deduct TDS himself on the behalf of Buyer and deposit the same?
If yes then what will be the accounting treatment? Please reply. Its urgent.
The Ultimate Responsibility is of Buyer to deduct TDS and deposit the same and file 26QB to seller.
However if Seller ded. TDS himself, the buyer should insist the seller to file 26qb and deposit the TDS with the NAme of Buyer as a deductor.
It is advisable for the buyer to take payment proof and take original copy of 26qb filled by the seller on behalf of buyer and check whether all details mentioned by the seller is correct or not.
Acccounting Treatment is . House Property A/c-dr, To seller A/c, to Tds Payable A/c,
On deposit of TDS by Seller,– TDs payable A/c dr, to Seller A/c instad of Bank
My question is if in the case of two buyer and one seller TDS will be paid by each buyer separately or may any one buyer
Each buyer is required to deduct tds separately on respective share, and deposit the same and file 26qb
What if by mistake excess tds is deducted ?
I have a certain query. Suppose the buyer has paid stamp duty charges amounting to Rs.50 lacs and the value of the property is Rs. 6.25 Crores. So is Tds deducted on 6.75 Crores or just rs. 6.25 crores???
tds to be ded. on Rs. 6.25/ only. as stamp duty is the duty which is charged by respective estate. and ther is no logic and reason to include stamp duty in value of property.
Thanks
is the TDS paid at the time of sale by the buyer in the name of the seller, recoverable by the seller on filling tax return?
Yes , tds receivable can be claim, if tax payble by the assessee is less than tds deducted.
Thanks
I have a question, Can the seller claim the money back while filling the tax return?
Yes, Seller can claim the tds by filling the ROI, if tax payable by him is less than tds deducted.
Thanks
IF BALANCE PAYMENT IS MADE AFTER 1.06.2013 , THEN 194IA GET ATTRACTED, IF VALUE OF PROPERTY EXCEED THRESHHOLD LIMIT,,
In case, balance payment is made after 1.06.2013, does TDS of 1% to be deducted only on the balance payment or full consideration?
Ex. pre-1st June, 2013, 40L is paid and post 1st June 2013 is 20L.
what will be TDS? 1% on 20L – 20,000? or 1% on 60L – 60,000?
Thank you for your reply in adance.
Tds will be deducted only on rs 20l @ 1%
Thanks
If a property is bought from a builder and installments are being paid now then does TDS to be done on all installments being paid after 1st June 2013 ? Does payments made before 1st june 213 also attracts TDS ?
If property is purchased before 1st june 2013 whose value exceed 50l , and payment is made after 1st june 2013, then tds will be deducted only on payment made after 1st june 2013.
Thanks
What if partial payment was made prior to 1st June 2013?