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What is Section 194IA of Income Tax Act? Section 194IA of the Income Tax Act is a provision related to the deduction of tax at source (TDS) on payments made for the purchase of immovable property. Who is required to deduct and what is the Threshold Limit rate of TDS under Section 194IA? A
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FAQ :
Section 194IA is a provision of the Income Tax Act that deals with the deduction of tax at source (TDS) when an immovable property is purchased.
Any person paying ₹50 lakhs or more to a resident for the transfer of immovable property (excluding agricultural land) must deduct TDS at a rate of 1%. If the seller's PAN is not provided, the TDS rate increases to 20%.
TDS under Section 194IA is paid using Challan 26QB, which can be accessed and filled out on the Income Tax e-filing portal.
Form 16B can be downloaded from the TRACES portal after logging in, navigating to the 'Download' tab, selecting 'Form-16B (for the buyer)', and providing the seller's PAN and the acknowledgement number from Form 26QB.
The TDS must be deposited within 30 days from the end of the month in which it was deducted, and Form 16B must be issued to the seller within 15 days of the due date for furnishing Form 26QB.
Penalties can include interest at 1% per month for non-deduction or 1.5% per month for non-deposit, a late filing fee of ₹200 per day for Form 26QB, and a penalty under Section 271H ranging from ₹10,000 to ₹1 lakh.
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