Section 194ia

This query is : Resolved

swati (Querist)
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22 May 2013 If we are Purchaser

1. When to deduct TDS ? At the time of agreement or payment ? If we pass JV of purchase on the date of agreement & credit a/c of the payee, TDS on the entire agreement value will be deducted at once. But if we don’t pass JV till we receive possession, will entire TDS be deducted at once or to be deducted from each payment?

2. Advance paid Rs. 20 lacs before 31/05/2013. Agreement entered on 03/06/2013 for Rs. 60 lacs. TDS will be deducted on Rs. 40 lacs or 60 lacs ?

3. Agreement entered before 31/05/2013. Part payment made after 31/05/2013. Is TDS required to be deducted, if yes, on which amount ?
NO
 Land purchased for Rs. 80 lacs from 4 joint owners vide a single agreement. (Payments made by different cheques to different individuals). Will TDS apply? Is the limit of Rs. 50 lacs is qua-seller or qua-purchase? YES

4. TDS to be deducted only on principal value or also on other charges such as legal charges, development chgs, electricity connection chgs etc.. mentioned separately in the agreement.

5. Does TDS apply on car parking space charges not mentioned in the agreement, but paid vide a separate parking space allotment letter ?
6. If PAN of the payee is not available at the time of deduction, will TDS be deducted @20%?

7. Is the procedure of payment, returns, form 16A etc. is same as for other TDS provisions or is there any special procedure prescribed for this section?

8. Is there disallowance provision for failure to deduct TDS under this section ?

If we are Seller

1. If buyer doesn’t deduct TDS, are there any adverse consequences for us as a seller ?

2. What are the documents we have to take from the buyer ?

raghavender upadhyay

raghavender upadhyay (Expert)
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22 May 2013 1) a)Any person being a transferee who is liable to pay to a resident by way of consideration for transfer of any immovable property shall at the time of credit of such sum to the account of the transferor or at the time of payment in whatever manner, has to deduct tax at source at 1 percent.

b)The liability to deduct tax at source is at the time of actual payment or credit of such sum to the account of the transferor whichever is earlier. Date of Registration. i.e. 3/6/2013

2)This provision will be applicable in respect of transactions effected on or after 01.06.2013. i.e TDS to be made on Rs. 60 Lakhs.

3) a)No. This provision will be applicable in respect of transactions effected on or after 01.06.2013

b)The threshold limit for application of tax deduction at source is Rs.50 lakhs. Where the transaction is less than Rs. 50 lakhs, the liability to deduct tax at source will not be applicable. It is not still clear whether provision applicable on transaction basis or on the number of seller basis. So we select which is beneficial to the Assessee i.e. on the basis of the number of seller and treat each seller as different transaction.
but Registrar while filing AIR will report the same to the IT department.

4) tds will be on consideration for transfer of any immovable property i.e. not to consider legal charges and any other expenses in consideration.

6) Yes. 20% will be applicable.

7 & 8) It is still not clear whether the transferee shall be required to comply with all the other compliances of tax deduction at source, e.g., filing of TDS returns, issue of TDS certificates, etc. This could prove cumbersome as well as burdensome