A New Section 194IA was added in the Income tax Act, 1961 by the Finance Act, 2013 which was Introduced by P. Chidambaram while announcing the Budget 2013 to 2014. This Section has been inserted for TDS on Sale or Transfer of certain Immovable Property other than Agricultural Land. The Assessee can take a glance at the clear report on TDS on Sale of Property, which is applicable under Section 194IA.
TDS on Sale of Property – Section 194IA
The Former Indian Finance Minister P. Chidambaram introduced Section 194IA for TDS on Property @ 1% on all Immovable Property Transactions over Rs. 50 Lakhs. The main motto of introducing this Section is that almost half of the transactions are carrying without the PAN Card Number. In keeping the view of that this Section 194IA came into existence and would be applicable w.e.f 1st June 2013.
Provisions of Section 194IA
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 the transfer of any immovable property (other than agricultural land) is liable to deduct tax at source under Section 194IA. This Tax shall be deducted at the time of payment or at the time of giving credit to the transferor whichever is earlier.
(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees.
(3) The provisions of section 203A (pertaining to TAN) shall not apply in respect of tax deducted under Section 194IA.
Rate of TDS
- It is specifically mentioned in the Section 194IA that if the Assessee is not submitting the Permanent Account Number then in that the tax deducted at source is @ 20% if the amount of the immovable property is Rs. 50 lakhs or above.
- The Rate of Tax Deducted at Source is @ 1% if the assessee has submitted his Permanent Account number when the property purchase value is Rs. 50 lakhs or above.
Here the purchaser is required to furnish a certificate of deduction of tax at source in Form No.16B to the seller within 15 days from the due date for providing the challan with the statement in Form No.26QB.
Applicability of Section 194IA
Section 194IA is only attracted for the transactions on or after 1st June 2013.
For e.g., Sale agreement is made before 1st June 2013 but consideration received after 1st June 2013.
Section 194IA is not Applicable
Advance consideration of Rs. 5000,000/- or more is received before 1st June 2013, but sale agreement made after 1st June 2013.
Steps to fill form 26QB
These are the steps to fill the form 26QB. Download the form and fill the form without any mistakes according to the guidelines given here.
- Visit the TIN NSDL website www.tin-nsdl.com
- In the home page click on TDS on Sale of Property.
- Click on Online form for furnishing TDS on Sale of property (Form 26QB).
- Select the applicable challan for TDS on Sale of Property.
- Fill the details like PAN of the seller and buyer, Communication details of seller and buyer, Amount paid or credited and tax deposit details.
- After filling the Form 26QB, a confirmation screen appears. There you can see 2 options as
- Print Form 26QB.
- Submit to the bank.
- Then you can see a unique acknowledgment number is also displayed on the screen.
- Save the acknowledgment number for future use and click on Print Form 26QB to print the form.
- To make the payment through internet banking click on ‘Submit to the bank’.
- Click on the link https://onlineservices.tin.nsdl.com/etaxnew/Authorizedbanks.html for the list of authorized banks.
- On successful payment a challan counterfoil will be displayed containing CIN, payment details, and bank name through which e-payment has been made. This counterfoil is proof of payment being made.