194IA TDS

1. 1 Welcome To Workshop on TDS

2. TDS on Sale of Property June 1, 2013 2

3. As per Finance Bill of 2013, TDS is applicable on sale of immoveable property wherein the sale consideration of the property exceeds or is equal to Rs 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration. TDS on Property 3

4. 4 Finance bill 2013 says if the sale consideration of property exceed or equal to Rs. 50,00,000 then TDS should be deducted @ 1 % by the buyer. It means the TDS should be deducted on whole amount not on the amount exceeding Rs. 50,00,000. For Ex. If sale consideration of any property is Rs. 75,00,000 then TDs should be deducted on Rs. 75,00,000 @ 1 % not on Rs. 25,00,000 (75,00,000-50,00,000)

5. SECTION 194 IA OF INCOME TAX ACT 1961 Any person being a Buyer ( transferee) , responsible for paying (other than the person referred to in section 194LA) to a resident Seller ( transferor) any sum by way of consideration for transfer of any immovable property ( other than agriculture land ), shall , at the time of credit of such sum to the account of the Seller(Transferor) or at the time of payment such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one percent of such sum as income tax thereon. ` 5

6. Points to remember Deduct tax @ 1% from the sale consideration. PAN of Seller as well as Purchaser should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction. Deductor is not required to obtain TAN for deducting TDS. If seller is not giving his PAN No. then buyer shall deduct TDS @20 %. Do not commit any error in quoting the PAN or other details in the online Form as there is no online mechanism for rectification of errors. For the purpose of rectification you are required to contact Income Tax Department. While completing the Online form 26 QB, please note the following points:- Fields marked with * are mandatory Do not enter double quotes (“ ") in any of the fields. 6

7. Tax so deducted should be deposited whether offline/online in the Government Account through any of the authorized banks and both options are available on NSDL website. Payment of Tax 7

8. 8 Here whether you choose online system for payment of tax (e-tax)or offline system . You have to Fill form 26QB online which is necessary. In other words you have option of online /offline is only for payment of tax .

9. These are the Authorized Banks 9

10. Log on to NSDL-TIN website ( www.tin-nsdl.com ) Steps to Fill Form 26 QB 10

11. Click on the option “TDS on sale of property” Under TDS on sale of property, Click on the option ‘Online form for furnishing TDS on property’ Under TDS on sale of property, click on the option “Online form for furnishing TDS on property” Steps to fill form 26 QB 11

12. Select Form for Payment of TDS on purchase of Property Steps to Fill Form 26 QB Click on the option “TDS on sale of property’ 12

13. Form 26QB requires complete information about following: Buyer Seller Property detail Date of Transaction Date of Tax Deduction Detail of Bank 13

14. Steps to Fill Form 26 QB Select Tax applicable for which payment is to be done Mention PAN of Transferee/Buyer Mention PAN of Transferor/Seller Select Financial Year from the drop down for which payment is to be done Re-enter PAN of Transferee/Buyer Re-enter PAN of Transferor/Seller 14

15. Steps to Fill Form 26 QB Provide Complete address Transferee/Buyer Provide Complete address Transferor/Seller 15

16. Steps to Fill Form 26 QB Provide Complete address of Property transferred Mention the date of Agreement/Booking of property Mention the Total value of consideration (Property Value) Mention if the above payment is done in Lump sum or in Installments 16

17. In Type of Property we have following options 17

18. Steps to Fill Form 26 QB Please select the amount paid/credited (Enter the amount paid to the Transferor/Seller) Please enter the amount paid/credited (Enter the amount paid to the Transferor/Seller) Please enter the TDS rate (Tax rate at which the TDS was deducted by the purchaser at the time of purchase of the property) Please enter the TDS amount to be paid (amount deducted by the purchaser at the time of purchase of the property ) 18

19. Here department is silent about issues related to total value of property. Whether EDC and IDC are included in total value of property or not. Whether Club charges are included in total value of property or not. Whether parking charges are included in total value of property or not. As it is clearly mentioned that if PAN is not provided by seller then TDS should be deducted @ 20 % but according to requirement of Form 26 QB PAN is mandatory to fill. Otherwise you are not able to fill Form 26QB 19

20. 20 Steps to Fill Form 26 QB Choose this if online system of payment is adopted Choose this if offline system of payment is adopted Choose the Bank name , here bank branch name does not matters

21. Steps to Fill Form 26 QB If all the above detail including the name displayed (as per ITD) is correct then, click on “proceed” button In case you have made a mistake in data entry, click on “clear form” to correct the same. 21

22. After submitting the form, Form 26 QB will be auto generated with nine digit alphanumeric acknowledgement number, Then take a print out of Form 26QB and Acknowledgement & TDS amount will deposited in authorized bank online/ offline as per your convenience. If TDS is deposited offline then TDS would be deposited with this form with in fifteen days of deposit of this form but books of accounts says seven days instead of fifteen days. 22

23. 23 TDS Certificate Form 16 B Form 16 B is the TDS Certificate to be issued by the deductor ( Buyer) to the deductee ( Seller) in respect of taxes deducted and deposited into the government account . Form 16 B will be available for download from the website of Centralized Processing Cell of TDS (CPC-TDS) www.tdscpc.gov.in After depositing tax you will be able to take print out of Form 16 B after 7 days.

24. If Nine digit alpha numeric Acknowledgment number is misplaced then it can be again retrieved. 24

25. THANKS Regards Sanjay Thareja (FCA) 25