Since the new rule popped up, and its applicability was dated from 1st June 2013, there was a confusion regarding the depositing the tax and claim of such tax deposited. Whether the deductor would have to apply for a TAN and how and when the tax is to be deposited?
As per section 194-IA, every person (even individuals) making a payment for consideration of an immovable property, not including agricultural land, will withhold tax @ 1% of the transaction amount (if the amount is INR 50 Lacs or INR 5 Million or more).
On 31st May, this was made clear by the Central. As per notification no. 39/2013 dated 31 May 2013 the following things have been made clear:
- Depositing of withholding tax.
- Issuance of certificates for such tax
- Filing a return of withholding tax.
Summary of section 194-IA and Notification no. 39/2013
|Deduction of Tax||At the time of payment of a consideration of INR 50 Lacs (INR 5M) or more. (u/s 194-IA)|
|Deposit of Such Tax||This tax, like all other sections, has to be deposited within 7 days from the end of the month in which the tax was deducted. (as per RULE 30(2)(A))|
|How to Deposit this Tax||Tax is to be accompanied by a challan-cum-statement in Form 26QB , electronically, within the specified time. (in RBI, SBI or any other authorised bank) (as per Rule 30(6)(A))|
|Issuance of Certificate of withholding Tax||Every person responsible for deduction of tax u/s 194IA shall furnish a certificate of TDS in Form 16B to the payee within 15-days from the due date for furnishing the challan-cum-statement in form 26QB (i.e. within 22days of the end of the month in which the tax was deducted) downloading the same from the web portal specified by DGIT.|
|TDS Return||Not required.|
The above would not require the payer to obtain a TAN as the Forms 26QB and 16B are to be filed using the PAN details of the parties to the transaction. Well this is a great move by the government to keep of a track of high value transactions.
Download the above in PDF Format: Guide on section 194-IA, Form 26QB and Form 16B.
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