TDS Section 194IA payment on transfer of immovable property

Introduction:

Any sum paid by way of consideration for transfer of any immovable property (other than agricultural land) is covered under section 194-IA, provided the consideration for transfer of an immovable property is not less than Rs. 50 lakhs.

For applicability of section 194 IA following conditions need to be satisfied:
1. The payer must be any person making payment for the purchase of property to a resident payee.

2. The payee must be a resident transferor of an immovable property (other than agricultural land).

3. The payment must be by way of consideration for transfer of any immovable property (other than agricultural land).

4. The quantum of payment, or stamp duty value of property, must be Rs. 50 lakhs or more.

Time of deduction:
Tax shall be deducted at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.

Rate of TDS:
Tax shall be deducted at the rate of 1%.

Form 26QB:
Every person responsible for deduction of tax under section 194-IA shall furnish to the Director General of Income-tax (System) or the person authorised by him a challan-cum-statement in Form No. 26QB electronically within 30 days from the end of the month in which the deduction is made.