Section 194IA of the Income Tax Act,1961 details the provisions relating to TDS on purchase of Immovable Property. Here we look at all the provisions in detail.
Who is required to deduct tax on purchase of Immovable Property?
It is the purchaser or transferee who is required to deduct TDS on payment made to the transferor (seller) at the time of credit or payment whichever is earlier.
What is the rate of TDS and exemption limit?
TDS is required to be deducted by the purchaser @ 1% of the consideration i.e. payment made to seller.
No TDS is required to be deducted if the total sale consideration of the property is less than Rs.50,00,000.
However in case the sale value of the property is 50,00,000 or above, TDS on the whole amount has to be deducted @ 1% i.e. no exemption is to be given for amount upto 50 lacs.
Is it applicable on all immovable properties?
No TDS is required to be deducted if the land is in the nature of Agriculture land (other than agriculture land which is liable to income tax as per the provisions of Section 2(14)
Other than agriculure land, it is applicable on all land or building or part of the building.
What are included in 'Consideration for transfer of immovable property'?
Consideration for transfer of Immovable Property will include all charges such as club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges which are incidental to the transfer of immovable property.