What is Section 194IA under Income Tax Act?


In this part of our TDS series, we’ll touch Section 194IA tax deduction provisions which are as follows:


Section 194IA: TDS on Payment on Transfer of Immovable Property (Not Being an Agricultural Land)


  • Who has the need to deduct TDS u/s 194IA?

Any person (Buyer or Transferee) who enters into an agreement with a resident for transfer of an immovable property (land or building or both but not an agricultural land) is required to deduct TDS under this section.


  • What is the rate & time of tax deduction u/s 194IA?

The rate of the tax deduction is 1%. And the time of deducting tax is earlier of, the credit of income to the account of the payee (receiver) or actual payment (in cash, cheque, draft or other modes).

Some Other Points if-

  • The total amount of consideration for the transfer of immovable property is less than Rs.50 Lakhs then no TDS u/s 194IA is required.

  • The provisions of this section are attracted then there is no requirement of TAN.

  • If Section 194LA (i.e TDS on Payment of Compensation on Acquisition of Certain Immovable Property) is applicable then provisions of Section 194IA will not be applicable.

Author


Team Tax2Win