Section 194IA- TDS on Purchase of Property @ 1%

Section 194IA- TDS on Purchase of Property @ 1%

The purchaser of an immovable property (Other than agricultural land) has to deduct tax at source (TDS) @1%, while paying consideration the seller, if the value of immovable property is Rs 50 lakhs or more

In order to prevent circulation black money in immovable property transactions, the government of India has introduced a law in June 2013, wherein, the purchaser of a immovable property has to deduct tax at source (TDS) @1% has to deduct on the total sale consideration before making the payment to the seller.

Points to be remembered by the Buyer of the Immovable Property:

  1. Deduct tax @ 1% from the total sale consideration or in case of installment payment, deduct TDS @ 1% on each Installment Payment.
  2. Collect the Permanent Account Number (PAN) of the Seller of Immovable property  and verify the same with the Original PAN card.
  3. PAN of seller of Immovable property  as well as Purchaser of Immovable property  should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction Immovable property .
  4. Do not commit any mistake in quoting the PAN or other data  in the online 26QB Form .

Points to be remembered by the Seller of the Immovable Property:

  1. Give your PAN No. to the Purchaser of Immovable property for furnishing information regarding TDS deducted to the Income Tax Department for legal compliance purpose.
  2. Verify deposit of TDS by the Purchaser of Immovable property  in your Form 26AS Annual Tax Statement.



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Interest on Late Deposit of TDS on Immovable  Property
In case the TDS  not been deducted, the buyer of immovable property  would be required to pay interest @ 1% interest per month on TDS not deducted.
In case, the TDS has been deducted but has not been paid within due date, Interest @ 1.5% per month would be applicable .

Penalty for Late Deposit of TDS on Property –  penalty  may  be levied of upto Rs. 1 Lakhs for Late Deposit of TDS on immovable Property.

Penalty for Late Filing of Form 26QB: In case of late filing of TDS Return (Form 26QB), a penalty of Rs. 200 per day will be levied. the Penalty for late filing of Form 26QB  should not exceed the amount of TDS deducted.

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