Section 194ia
This query is : Resolved
08 June 2013
In case entire payment is received before 1st June 2013 and only sale deed registration is pending, will TDS @ 1% required?
CA Kapil Verma
(Expert)
08 June 2013
not required, in this case
10 June 2013
Thanks. Now in this situtation if the sale deed amount is Rs. 52,00,000/-, out of which Rs. 51,00,000/- is received before 1st June, 2013 but Rs. 1,00,000/- is pending and shall be received at the time of sale deed in June 2013, then whether TDS to be deducted and if yes on what amount?
10 June 2013
Thanks. Now in this situtation if the sale deed amount is Rs. 52,00,000/-, out of which Rs. 51,00,000/- is received before 1st June, 2013 but Rs. 1,00,000/- is pending and shall be received at the time of sale deed in June 2013, then whether TDS to be deducted and if yes on what amount?
CA Kapil Verma
(Expert)
10 June 2013
no n this case also sec-194IA not apply.
10 June 2013
why pls explain with reason...is it that if Rs. 50 lac payment is to be done after 1st June,2013 then only TDS shall be applicable?
23 July 2025
Under Section 194IA of the Income Tax Act, TDS is applicable on the transfer of property (other than agricultural land) where the transaction value exceeds Rs. 50 lakhs. The section applies when the payment for the property transaction exceeds Rs. 50 lakhs, and the buyer is required to deduct 1% TDS from the sale consideration at the time of making the payment.
Key Points:
TDS Applicability:
Section 194IA applies only when the payment is made after 1st June 2013 (the date when this section came into effect).
If the entire payment for the property has already been made before 1st June 2013, then TDS is not applicable, regardless of the pending registration or other formalities.
Transaction Amount and TDS:
The key factor for TDS under Section 194IA is the payment, not the date of registration or sale deed execution. If any part of the payment is made after 1st June 2013, and the total sale consideration exceeds Rs. 50 lakhs, then TDS applies on the entire amount that is paid after that date.
Now, to your specific case:
The total sale consideration is Rs. 52,00,000.
Rs. 51,00,000 is paid before 1st June 2013, and Rs. 1,00,000 is paid after 1st June 2013.
In this case, TDS under Section 194IA does not apply because:
The Rs. 51,00,000 was paid before the section came into effect (before June 1, 2013), and TDS is only applicable on payments made after June 1, 2013.
Since only Rs. 1,00,000 remains pending and this amount is being paid after 1st June, it is less than Rs. 50 lakhs and thus TDS is not applicable to this remaining amount either.
Conclusion:
TDS is not applicable on the entire Rs. 52,00,000 because the payment was made largely before June 1, 2013, and only a small portion of Rs. 1,00,000 remains unpaid after June 1, which is below the Rs. 50 lakh threshold.
Thus, you don't need to deduct TDS in this case.
Key Points:
TDS Applicability:
Section 194IA applies only when the payment is made after 1st June 2013 (the date when this section came into effect).
If the entire payment for the property has already been made before 1st June 2013, then TDS is not applicable, regardless of the pending registration or other formalities.
Transaction Amount and TDS:
The key factor for TDS under Section 194IA is the payment, not the date of registration or sale deed execution. If any part of the payment is made after 1st June 2013, and the total sale consideration exceeds Rs. 50 lakhs, then TDS applies on the entire amount that is paid after that date.
Now, to your specific case:
The total sale consideration is Rs. 52,00,000.
Rs. 51,00,000 is paid before 1st June 2013, and Rs. 1,00,000 is paid after 1st June 2013.
In this case, TDS under Section 194IA does not apply because:
The Rs. 51,00,000 was paid before the section came into effect (before June 1, 2013), and TDS is only applicable on payments made after June 1, 2013.
Since only Rs. 1,00,000 remains pending and this amount is being paid after 1st June, it is less than Rs. 50 lakhs and thus TDS is not applicable to this remaining amount either.
Conclusion:
TDS is not applicable on the entire Rs. 52,00,000 because the payment was made largely before June 1, 2013, and only a small portion of Rs. 1,00,000 remains unpaid after June 1, which is below the Rs. 50 lakh threshold.
Thus, you don't need to deduct TDS in this case.
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