Section 194IA of Income Tax -TDS on payments made for sale-transfer of Immovable Property

TDS ON SALE/TRANSFER OF IMMOVABLE PROPERTY - SECTION 194IA

Section 194IA of the Income Tax Act,1961 details the provisions relating to TDS on the purchase of Immovable Property.

Here we look at the provisions in detail.

Who is required to deduct tax on the purchase of Immovable Property?

It is the purchaser or transferee who is required to deduct TDS on payment made to the resident transferor (seller) at the time of credit or payment whichever is earlier.

What is the rate of TDS and exemption limit?

TDS is required to be deducted by the purchaser @ 1% of the consideration i.e. payment made to the seller.

No TDS is required to be deducted if the total sale consideration of the property is less than Rs.50 lakhs.

However in case the sale value of the property is 50 lakhs or above, TDS on the whole amount has to be deducted @ 1% i.e. no exemption is to be given for amounts up to 50 lacs.

Is it applicable to all immovable properties?

No TDS is required to be deducted if the land is agricultural land (other than agricultural land which is liable to income tax as per the provisions of Section 2(14))

What is included in 'Consideration for transfer of immovable property'?

Consideration for the transfer of Immovable Property will include all charges such as club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee, or any other charges that are incidental to the transfer of immovable property.

Need help in filing Form 26QB? click herewww.karrtax.in/form-26qb