Tds on immovable property

TDS 897 views 3 replies

Suraj

939 Points Joined March 2007

Sir / Madam

This is in reference to the provision of Section 194 IA of Income tax Act. My queries are as follows:

1) If the agreements were executed for purchase of property as on 1st June 2010 whether this transaction attracts the provisions of Section 194IA i.e. TDS on Immovable Property?

2) In the same case, the transactions entered into for two separate properties through two different agreements for Rs. 28 lacs and Rs. 30 lacs resp. inn joint name. Whether the limit of Rs. 50 lacs as set u/s 194IA is applicable to these transactions?

3) Suppose, the above section is applicable then on whose PAN the TDS to be deductible?

Kindly revert.

Thanks,

Suraj

Replies (3)

CA Momin Owais Ahmed

Audit Manager

154 Points Joined December 2012

1. In case where agreement is entered before Applicability of Section 194IA, then it also attract Section 194IA.

2. Still there is no clarification on this,

But if we have close reading of the section 194 IA then we find a word Transferor in the Section not Transferors, which means Payment to Individual transferor of Property, if you are paying less than a limit to individual Transferor then sec 194IA will not attract,

Secondly, if you file TDS payment challan cum return for Sec 194IA then you have to Qoute PAN of Transferor, there also they ask for PAN of only one person, It also indicates that TDS is require to Deduct only when Payment to individual transferor exceeds specified Limit,

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Joined June 2012

Hi i thought TDS provisions shall not be applicable for the following reasons

1)In recent amendments,it total consideration for A TRANSFER exceed 50 lakh rupees,then TDS @ 1% on entire consideration should be deducted.so they specifically mention for a transfer but not aggregate payments to a person regarding transfer of immovable properties.so if they are seperate assets and if you execute seperate deeds for those two assets,then TDS provisions may not be applicable as each asset value does not exceed lakh rupees

i want a little clarification regarding joint name.is one asset is urs and another is others asset?

CA Deepak Rathore

EXPERT

281 Points Joined December 2010

‘194-IA. Payment on transfer of certain immovable property other than agricultural land.—(1) 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 transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent. of such sum as income-tax thereon.

(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.

Explanation.—For the purposes of this section,—

(a) "agricultural land" means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2 ;

(b) "immovable property" means any land (other than agricultural land) or any building or part of a building.’.