Jyothis (Article) (1127 Points)
21 October 2015Is tds applicable on Payment made by an individual who has business income,but not liable for Tax Audit.
1)Nature of Payment : purchase of land covered u/s 194IA to ,seller resident.
2)Nature of Payment : purchase of land covered u/s 195 to ,seller Non resident.
Rashi Bajaj
(CA)
(752 Points)
Replied 21 October 2015
TDS @ 1% to be deducted for payments on purchase of land to RESIDENT sellers only as per Ser 194IA.
Limit: 50Lacs
Jyothis
(Article)
(1127 Points)
Replied 21 October 2015
Are individuals liable for deduction of tds, if tax audit is not applicable for them.
Mr.A (Resident) purchased land from Mr.B (Non resident) for Rs.50 lakhs plus.
Since 194-IA is not applicable,TAN no is mandatory.
My question is whether Mr.A should apply for TAN & deduct tds on payment made to Mr.B u/s 195.
Miss Rinkal
(Student)
(1309 Points)
Replied 21 October 2015
If amt is paid to a non resident then irrespectivof whether covered by tax audit or not, tan no is required to be given and tds needs to be deducted
And what Rashi has mentioned I agree with her. Also would like to add to her point that it is liable for tds deduction even if not liable for tax audit and tan is not mandatory or need not apply for tan in case of sec 194IA
Jyothis
(Article)
(1127 Points)
Replied 21 October 2015
Is there any condition which determines liability of Individual to deduct TDS on payment made-Say
1)"An Individuals or an H.U.F. is not liable to deduct TDS on such payment except where the individual or H.U.F. is carrying on a business/profession where accounts are required to be audited u/s 44AB, in the immediately preceding financial year."
-https://www.lessmytax.com/persons-liable-to-deduct-tax-at-source-tds/(See link for detail)
2)Or 194-IA or 195 payments requires every person to deduct tds. (Irrespective of condition determining the liability to deduct tds.
Miss Rinkal
(Student)
(1309 Points)
Replied 22 October 2015
Sorry I could not understand your question. Please elaborate.
Also the link that you provided shows an error. Please upload the link again
Jyothis
(Article)
(1127 Points)
Replied 22 October 2015
On what all situations an individual is liable to deduct.
As per- https://www.lessmytax.com/persons-liable-to-deduct-tax-at-source-tds/
Only individual who has income from business/profession liable for tax audit is liable to deduct tds.
My question is whether land purchase covered under 194IA & 195(incase of NR Seller),every individual who buys for personal/otherwise should deduct td/not.
Since TAN is not mandatory for 194IA-whether such amendement of section is made to ensure tax deduction by every individual/not.Say having only salary income.
{if link is not working please search the key word "tds liability on individual" on google.}
Miss Rinkal
(Student)
(1309 Points)
Replied 22 October 2015
OK as per your question, an individual is required to deduct tax as per sec 194IA and 195 irrespective of whether it is subjected to tax audit or not.
TAN is not required in case of tds payment made u/s 194IA whereas u/s 195, tan is mandatorily required to be quoted
Regarding your link, the details are correct. But for 194IA and 195, they are not to be considered. In every tds section it is to be considered separately, meaning as per the provisions of sec 194IA and 195, all the said exceptions are not applicable
Jyothis
(Article)
(1127 Points)
Replied 22 October 2015
In every section of tds ,it is stated that "any person responsible for paying".Say 194C,195,194IA
Then how can we say-194-IA & 195 is only exceptional to every individual & requires to deduct tds.
Can anyone quote such exception/Section stating every individual to deduct tds irespective of tax audit
Does it mean to include tax deduction by individual on land purchase for personal use of individual also.
I couldn't find such exception in along with section 194 IA & 195.
Miss Rinkal
(Student)
(1309 Points)
Replied 22 October 2015
Refer sec 197 and sec 197A. This is what I was pointing out at. Although sec 195 can avail lower rate of deduction which was mistake on my part. However this was what I was trying to explain
Jyothis
(Article)
(1127 Points)
Replied 22 October 2015
Ok.sec 197 & 197A deals with lower deduction,if reciepient furnishes prescribed certificate to the Payer/Deductor for lower deduction of tds.
My doubt is ,
Where in Act specifies tds to be deducted by Individual for payment to be made for others for personal/commercial purpose,incase payer (Individual) is not liable for tax Audit.
Since in preample itself, specifies person responsible for deduction of tds.
1.Individual/HUF only if they are liable for Tax Audit.
2.Company/Firm
Miss Rinkal
(Student)
(1309 Points)
Replied 22 October 2015
Sorry but I m really not able to get your question. What exactly are you pointing out at is not understood by me
Jyothis
(Article)
(1127 Points)
Replied 22 October 2015
We all know when a company/Firm makes any payment covered u/s any section of tds,they are liable to deduct tds.
However an Individual/HUF is not liable to deduct tds when they make any payment to others unless they are covered under Tax Audit.
Consider an example:
1.Mr.A purchased a land Worth Rs.50 lakhs plus
a.From Mr.B (Resident Seller)
b. From Mr.C (Non Resident Seller)
Is Mr.A liable to deduct tds when he makes payment to Mr.B/C.
Will answer change based on the purpose Say -Personal/Commercial.
My Doubt where in act specifies individual/Huf not covered by Tax Audit to deduct tds when they make any payment covered under tds provisions.
Please Quote the Section Which specifically states every individual to deduct tds even if they are not covered u/s Tax Audit.
Since tds on land purchase requires individual to apply for TAN & file tds return, may be only 1 transaction in his entire life(194IA specifically states the 203A is not applicable).However he has apply for Tan incase of 195.
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