TDS on transfer of property above Rs 50 lakh or more: TAN requirement dropped

TO reduce compliance burden on tax deductor the MoF today moved an amendment in the Finance Bill and the same was passed by the Lok Sabha without a debate.

Netizens may recall that the Finance Bill, 2013 had proposed introduction of new section 194-IA in the Income- tax Act, which provides that every transferee, at the time of making payment or crediting of any sum as consideration for transfer of immovable property (other than rural agricultural land) to a resident transferor, shall deduct tax, at the rate of 1% of such sum if the total amount of consideration for the transfer of such immovable property is Rs fifty lakh or more. As per the provisions of section 203A of the Act every person deducting tax under provisions of Chapter XVII-B is compulsorily required to obtain Tax Deduction and Collection Account Number (TAN).

In order to reduce the compliance burden on the deductor deducting tax under section 194-IA, it was proposed to insert a new sub-section (3) to the proposed new section 194-IA of the Income tax Act to provide that the provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of new section 194-IA.