TDS Section 194IA of Income Tax Act

Section 194-IA provides that any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land) shall deduct an amount equal to one percent of such sum as income-tax 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 the issue of cheque or draft or by any other mode, whichever is earlier.

No deduction shall be made where consideration for the transfer of immovable property is less than fifty lakh rupees.

The payer is any person, being a transferee, responsible for paying (other than the person referred to in section 194-IA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land).

The payee is the resident transferor of any immovable property (other than agricultural land).

The 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.

The tax shall be deducted at the rate of 1%.

If such person does not furnish PAN to the deductor, the deductor will deduct tax at source at higher of the following rates:


• the rate prescribed in the Act.
• at the rate in force, i.e., the rate mentioned in the Finance Act; or
• at the rate of 20 percent.

Where the PAN provided to the deductor is invalid or does not belong to the deductee, it shall be deemed that the deductee has not furnished his PAN to the deductor and above provisions shall apply accordingly.

Provisions pertaining to Tax Deduction and Collection Account Number, i.e., section 203A, shall not apply to a person deducting tax at source under Section 194-IA.

Any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of thirty days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB.

The sum so deducted shall be deposited to the credit of the Central Government by remitting it electronically to the Reserve Bank of India or the State Bank of India or to any authorized bank.

Every person responsible for deduction of tax under section 194-IA shall furnish the certificate of deduction of tax at source in Form No. 16B to the payee within fifteen days from the due date for furnishing the Challan-cum-statement in Form No. 26QB under Rule 31A after generating and downloading the same from the web portal specified by the Director-General of Income-tax (System) or the person authorized by him.

Every person responsible for deduction of tax under section 194-IA shall furnish to the Director-General of Income-tax (System) or the person authorized 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. CPC-TDS has also enabled the online functionality for correction in Form No. 26QB.

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