What is Section 194IA of Income Tax Act?
Section 194IA of the Income Tax Act is a provision related to the deduction of tax at source (TDS) on payments made for the purchase of immovable property.
Who is required to deduct and what is the Threshold Limit & rate of TDS under Section 194IA?
As per section 194IA, any person who is responsible for paying any sum to a resident for the transfer of any immovable property (other than agricultural land) worth Rs. 50 lakhs or more, is required to deduct TDS at the rate of 1% at the time of making such payment. If PAN not furnished, TDS will be 20% in all cases.
How to pay TDS u/s 194IA?
The steps to pay TDS through challan 26QB are:
- Log in to your account on the Income Tax e-filing portal.
- Select e-File from the menu and click on e-Pay Tax from the dropdown options.
- Click on '+ New Payment' to start a new payment transaction.
- Select '26QB TDS on Property' and click on the 'Proceed' button.
- Enter the buyer's details, which will be auto-filled based on your account information. You can make changes if needed and click on 'Continue'.
- Enter the seller's details, including their PAN and address, and click on 'Continue'.
- Enter the property details, including the property type, address, and sale details such as the date of agreement and the sale value. The tax amount will be calculated automatically. Once done, click on 'Continue'.
- Add payment details and select your preferred payment mode. Complete the payment process.
- Once the payment is successful, a challan will be generated, which you can download and keep for future reference.
How to download form 16B?
The steps to download Form 16B after making the TDS payment through Form 26QB:
- Log in to TRACES.
- Go to the 'Download' tab and click on 'Form-16B (for the buyer)'.
- Fill in the seller's PAN and acknowledgement number details related to the property transaction, and click on 'Proceed'.
- Verify all the details and click on 'Submit a request'.
- Wait for a few hours for the request to be processed. Check the 'Downloads' tab and select 'Requested Downloads' from the dropdown menu.
- Check the status of your Form 16B download request. If it says 'available', proceed to the next step. If it says 'submitted', wait for a few more hours before checking again.
- Download the '.zip file' containing the Form 16B. The password to open the '.zip file' is the date of birth of the deductor in the format of DDMMYYYY.
- Once you open the '.zip file', you can access the Form 16B in PDF format. Print out the form for future reference.
Due dates to deposit TDS u/s 194IA?
The TDS amount deducted under this section is required to be deposited with the government and a TDS certificate in Form 16B is to be issued to the payee (seller) within 15 days from the due date for furnishing the challan-cum-statement in Form 26QB. The due date for furnishing the challan-cum-statement is within 30 days from the end of the month in which the TDS was deducted.
Penalties for Non-payment of TDS u/s 194IA?
The penalties for non-payment of TDS under section 194IA of the Income Tax Act can be summarized as follows:
- Interest: If the tax was not deducted previously, the defaulter will be required to pay an interest of 1% per month. If the tax was deducted but not deposited, the defaulter will be required to pay an interest of 1.5% per month.
- Late Filling Fee: In case of default in filing the TDS return in Form 26QB, a late filing fee of Rs. 200 per day is applicable, starting from the due date of filing and ending on the date when the return is filed, subject to a maximum amount of the tax deducted at source.
- Penalty: If the TDS is not paid, a penalty may be levied under section 271H of the Income Tax Act. The penalty amount is a minimum of Rs. 10,000, which can go up to Rs. 1 lakh.
CAclubindia
