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The buyer is required to deduct TDS @ 1% on the total consideration under
section 194IA of Income Tax Act 1961.If the consideration of an immovable
property exceeds Rs. 50 lakhs. If PAN is not provided by the seller, TDS @
20% is deductible.
TDS is also required to be deducted when payment is made in instalments,
given that total sale price exceeds Rs. 50 lakhs in aggregate. The TDS in that
case must be deducted from each instalment.
Properties that are covered Sec 194-IA of Income Tax Act 1961 covers
residential property, commercial property whether built up or under
construction, as well as land except agricultural land.
Due date of deposit of TDS & filing of Return is to be deposited with the
Income tax authority by way of return cum challans in Form 26QB within 30
days of the month, following the month in which payment is made.
The buyer has to provide details like name, address, PAN, mobile number and
email id of the seller as well as buyer, in Form 26QB. The complete address of
the property, along with the date of agreement, total value of consideration, date
of payment, etc. also need to be provided.
Every person responsible for deduction of tax under section 194 IA shall furnish
the certificate of deduction of tax at source in Form No. 16B to the payee within
15days from the due date for furnishing the challan-cum-statement in Form No.
26QB under Rule 31A after generating and downloading the same from the web
portal specified by the Director General of Income-tax (System) or the person
authorised by him.
There is no requirement of obtaining TAN as per section 203A of Income Tax
Act 1961 for person responsible for deducting tax under section 194IA of
Income Tax Act 1961.
The interest payable under Section 201(A) of Income Tax Act 1961 is 1% per
month if tax wasn’t deducted and U/s 201(IA) of Income Tax Act 1961 @1.5%
in case this was done but not paid.
As per section 271H of Income Tax Act 1961, where a person fails to file the
statement of tax deducted/collect at source i.e. TDS/TCS return on or before the
due dates prescribed in this regard, then assessing officer may direct such
person to pay penalty under section 271H. Minimum penalty can be levied of
Rs. 10,000 which can go upto Rs. 1, 00,000. Penalty under section 271H of
Income Tax Act 1961will be in addition to late filing fees prescribed under
section 234E of Income Tax Act 1961. Apart from delay in filing of TDS/TCS
return, section 271H also covers cases of filing incorrect TDS/TCS return.
As per section 234E of Income Tax Act 1961, where a person fails to file the
TDS/TCS return on or before the due date prescribed in this regard, then he
shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during
which the failure continues. The amount of late fees shall not exceed the amount
If a person fails to deposit TDS deducted as required by or under the provisions
of Chapter XVII-B, shall be punishable U/s 276B of Income Tax Act 1961, with
rigorous imprisonment for a term which shall not be less than 3months but
which may extend to 7years and with fine.