Tds on sale of immovable property (sec 194ia) Simplified

Nikhil Jain

Accountant Articled

22 Points Joined December 2010

Suppose there are theree purchasers of the property being co applicants one is father and the others are this two sons. Father has paid Initial consideration from his own funds and the rest amount is paid through Bank Loan which is in the name of all applicants. Registration is also done in the name of all applicants.

Whether TDS U/s 194IA will be deducted by all applicants or only the main applicant will dedut tax and deposit it to the credit of central government?

K.MURUGAN

accountant

21 Points Joined October 2007

What is the position when land sale construction agreement in case of building promoters.Whether construction agreement leads to sale of immovable property?

Shankar Sharma

.....

25 Points Joined February 2012

As you have written above, Applicability of section :- Section 194IA is only attracted for the transactions on or after 1st June, 2013. For example:- Sale agreement is made before 1st June, 2013 but consideration received after 1st June, 2013 – Sec 194IA is not applicable.

My Question is, The transaction has been taken place after 01.06.2013 then why woulnt the provision applicable?????

Waiting for the

ANURAG

Student CA IPC / IPCC

25 Points Joined March 2014

Does the amount 50,00,000/= is the sum being paid only for the LAND??or it also includes the payment made to other officials towards registration fess & others??

MJ

Consultant

22 Points Joined March 2012

I paid an installment for my under-construction property and deducted TDS from the actual amount. I have then paid the TDS online.

Now, do I need to file TDS return too?

P Venkata Devaraj

Project Mgr.

54 Points Joined February 2011

Hi,

I have booked an apartment in a housing project. I am expected to make payment in instalments after every stage of completion as agreed earlier.

I have now received a request to pay an instalment on completion of 9th floor.

The cost for Flat is Rs. 5,78,728/-

And the service Tax is Rs. 29,454/-

Total amount to be paid is Rs. 6,08,177/-

My query is on which amount should the TDS of 1 % be deducted ?

Whether it is on the cost of Flat of Rs. 5,78,728/- or on the Total amount including Service Tax of Rs. 6,08,177/- ?

Appreciate if you could clarify the above point.

Rohan

Engineer

21 Points Joined March 2014

Its clear that that Buyer is responsible to pay the TDS to IT dept. Is there any point asking for this amount to the seller as seller will not be interested to pay this 1% TDS. so it will be always buyer who has to pay this amount as he is going to register the property? Also, for re-sale property if the property guidance/registration value is less than 50 lacs then will this TDS applicable even if seller is selling at more than 50lacs price ? please clarify.

CA Priyank

Priyank Sanghavi & Co

296 Points Joined January 2009

Dear Sir

If half payment made in march,2013 and half payment will be made in april,2014. Whether section is applicable, if total amt is Rs: 55,00,000/-???

If yes, then on which amt tax to be deducted? and which date should be given in filing form no 26qb for payment done and tds deducted?

Sunny Bafna

Articled

21 Points Joined December 2013

Suppose if i have taken a loan for rs 60 lakhs from bank nd i m paying 30 lakhs and the total value is 90 lakhs, than should ideduct tds nd how much

soundarya

Chennai

21 Points Joined February 2014

Any special provisions are applicable if the buyer of the property is an NRI

Nilesh K

CA CFE FAFD

97 Points Joined May 2009

Originally posted by : c chandra mohan
	Dear All C A 's How to pay TDS on Property purchased by Joint Buyers ? Whether we can pay thro separate challan in 26 Q ? c c m

Yes you may pay through separate challans

Nilesh K

CA CFE FAFD

97 Points Joined May 2009

Originally posted by : Mallik
	Hi, Request you update us and share your knowledge base with us about the TDS on property, 1st let me share my concern on the same. Our company name called J S Holdings, under the arm of J S Holdings, we have 2 verticals one is JSIP and another one is JSP. Both are two different entities. Normally JSIP will sell the divided share of land and give the contract to JSP to build a villa in the particular sold property. In this case there are 2 components of one is sale of land and construction, sale of property amount goes to JSIP and constrcution amount goes to JSP. If you add these two components it crosses Rs. 50 Lakhs. JSIP and JSP are two different entities, still the TDS on property is applicable? Now bank is deducted the TDS of 1% and our finance guys are arguing that JSIP and JSP is two different entities, bank or customer shouldn't deduct thDS. Please give us the clarity and do the needful. Thanking you. With regards, Mallik. C

It doesn't matter if there are more than one sellers for a property. From the buyer's point of view its a single property and total value is to be considered for purpose of TDS.

Nilesh K

CA CFE FAFD

97 Points Joined May 2009

Originally posted by : Shaswat Gandhi
	I want to know that weather the penalty under section 234E will be applicable on late submission of the online form or not? Under section 194IA

Fee under section 234E will not be applicable, as buyer need not file TDS return for this TDS deduction. Deduction under this section doesn't require the deductor to hold TAN

Nilesh K

CA CFE FAFD

97 Points Joined May 2009

Gaurav J Mehta

Founder & Proprietor

22 Points Joined August 2009

Originally posted by : Aryan Singhania (Pallav)

Hello buddy!!

Just wanted to know what will be the rate of TDS for an NRI on short term capital gain on transfer of rights by him/her in a residential property (ie by way of consideration received for cancellation of allotment of the property)

Await your reply.

Thanks & Regards,

TDS on sale of Immovable Property (Sec 194IA) – Detailed Overview

Provisions of TDS on sale of Immovable Property (Sec 194IA) – as stated:-

The provisions of this section states that TDS on sale of Immovable Property should be deducted at source from payment on transfer of immovable properties (other than agricultural land) where the consideration paid or payable is more than Rs 50,00,000/-. Earlier, there was no such deduction in case of immovable properties as it is in the case of salary, interest, rent etc. Any person responsible for paying to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), is liable to deduct tax at source under section 194-IA.Where the transaction is less than Rs 50,00,000 /-, the liability to deduct tax at source will not be applicable.

Rate at which TDS shall be deducted :-

Tax is deductible at the rate of 1% of the consideration payable to a resident transferor.

If a valid PAN is not provided by the seller, the tax rate would go up to 20%.

Obtaining TAN:-

Purchaser is not required to obtain a TAN for deduction.

Payment and return of TDS :-

Tax shall be deducted at the time of payment or at the time of giving credit to the transferor, whichever is earlier. If advance payment is being made then TDS would be required to be deducted at the time of advance payment itself. And if installment payment is made, the TDS would be required to be deducted at each such installment.

The tax deducted shall be paid to the credit of Central Government within a period of seven days from the end of the month of deduction.

Online payment u/s 194IA is mandatory and the tax should be deposited on challan-cum-statement on Form No.26QB. Form No 16B (TDS Certificate) will be issued by the deductor within fifteen days from the due date of depositing tax.

Applicability of section :-

Section 194IA is only attracted for the transactions on or after 1st June, 2013. For example:-

Sale agreement is made before 1st June, 2013 but consideration received after 1st June, 2013 – Sec 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. – Section 194IA is not applicable.

Where property is held by Joint-owners :-

In case of joint owners, the threshold limit of Rs 50,00,000/- is to be determined property-wise and not transferee-wise. The number of buyer or seller would not matter at all. The value of property should be more than Rs 50,00,000/- for applicability of deduction of tax.

For example:- A,B and C jointly purchased an immovable property. The purchase price for each owner is Rs 20lakhs, Rs 15 lakhs and Rs 35 Lakhs respectively. In this case individual purchase price is less than Rs 50,00,000 but the aggregate value of the transaction is exceeds Rs 50,00,000. Thus section 194-IA would be applicable.

Scope :-

Section 194-IA is applicable to all including relatives, minor, senior citizens etc.

However, if transfer is made without payment of any consideration like in case of gift, then this section will not apply.

Provisions for Non Resident Indian:-

If payment is made to a Non-Resident then section 194-IA will not be applicable. Rather section 195 will be attracted and TDS is required to be deducted @ 20%+EC&SHEC on the sale consideration. Surcharge @ 10% will be applicable if amount paid exceeds Rs 1 crore. The limit of Rs 50,00,000/- is not applicable in case of payments made to NRI’s.

Non Compliance:-

In case of failure to comply with the provisions, interest and penalty would be imposed to the purchaser.

Interest will be charged @ 1% p.m or part of the month for failure to deduct tax or short deduction of tax from the date the tax was deductible till the date the same is deducted.

Interest will be charged @ 1.5% p.m or part of the month for tax deducted but not paid to the government from the date of deduction till the date of actual payment.

Courtesy: Alok Patnia, ICAI.org, Journals

Aryan Singhania