Summary of TDS on Property, Cash withdrawals and others

“Explore TDS essentials: Section 194IA for Property Sale, 194N for Cash Withdrawals, 194O for E-commerce, and 194IB for Rent. Get insights on rates, thresholds, and compliance.”

The Article provides a brief summary of TDS provisions related to Section 194IA – TDS on Property Sale, Section 194N  TDS on Cash Withdrawals, Section 194O – TDS on E-commerce transactions and Section 194IB – TDS on Rent by Certain Individuals and HUFs.

Section 194IA : TDS on Property Sale

• The Section lays down that TDS should be deducted on purchase of a Immovable Property from a Resident Seller (except Rural Agricultural Land) having value > 50 lakhs

Hence Residential properties, Commercial Properties and Non Agricultural lands are covered

• The rate of TDS is 1% irrespective of payer or payee type
• Thresold : Rs. 50,00,000
• Sale Consideration shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property;
• TDS applicable on SC or Stamp duty value whichever is higher
• The Buyer need not apply for TAN to deposit this TDS
• He has to deposit using his PAN
• A separate form 26QB has to be filed. It is a return cum challan. Following details of buyer, seller and Property purchased are to be filled in this form :

• Buyer Name, PAN, Current address with Pincode, Mobile and Email Id.
• Seller Name, PAN, Current address with Pincode, Mobile and Email Id.
• Complete address of Property purchased along with Actual Sale Value, Stamp Duty Value, Date of Purchase, Date of Tax Deduction, Date of payment made to Seller
• Due date of TDS payment is 30days from the end of month of purchase (Rule 30(2A))
• As this is a Return cum Challan, any delay in filing 26QB attracts a late fees of Rs. 200 per day (Maximum upto TDS amount)

• Once 26QB form is filed by the buyer, the seller gets the credit of the Tax which reflects in his 26AS
• The buyer needs to create a Tax payer login on Traces site and issue a Form 16B to the seller

• Time of TDS deduction:
  • The TDS to be deducted at the time of payment or credit (Purchase) whichever is earlier

Section 194N : TDS on Cash Withdrawals

• The Section lays down TDS will be deducted @ 2 % on Cash Withdrawals exceeding 1 Cr during a Previous year. The TDS will be deducted on the withdrawals in excess of 1 Cr.
• For Example, If cash withdrawal during the year is 1.2 Cr, TDS @ 2 % will be deducted on 20 Lacs only
• By Whom ? :
  • By any Banks, Post office or Co-operative banks
• The limit of 1 Cr is for all accounts maintained by assessee with the same bank
• For Ex., if Assessee has 3 accounts with ICICI bank , and Cash withdrawn from each account is Rs. 40 lacs each. Then total cash withdrawn is 1.2 Cr, hence TDS will be deducted on 20Lacs
• Exception to the above Rule :
  • If Assessee has not filed ITR in All of the three Preceding previous years, then limit of Cash withdrawal will become 20Lacs
  • If Cash withdrawn is between 20 lacs to 1 Cr, then TDS @ 2 % to be deducted and if cash withdrawal exceeds 1 Cr , TDS @ 5% will be deducted
• The provisions of this section will not apply for Payment to:
  • Government or
  • Other banks, Post Offices or Co-operative banks
  • Any White Labels ATMs
• W.e.f. 1.04.2023, TDS threshold for Co-operative banks increased to 3 Cr.

Section 194O : TDS on E-commerce transactions

• An E-commerce operator will deduct TDS @ 1% on Sales or services provided by E-commerce participant through its Website
• The TDS to be deducted at the time credit of Sale or Service to account of E-commerce participant or payment whichever is earlier
• Note : Even if the purchaser directly makes payment to E-commerce Participant for Sale or Services received , but it is facilitated by E-commerce operator, TDS has to be deducted on such amounts also
• Threshold : An Individual or HUF, having sales/services upto 5 lacs per annum through E commerce and PAN or Aadhar is furnished
• In case of E-commerce transactions, other TDS provisions will not apply
• However if E-commerce operator provides any advertising or other services, such services will be covered under TDS provisions
• For Ex, if M/s. XYZ gives advertisement on Amazon website for Rs. 50000, it will deduct TDS while making payment to Amazon.
• “e-commerce participant” means a person Resident in India selling goods or providing services or both, including digital products, through E-commerce;

Section 194IB : TDS on Rent by Certain Individuals and HUFs

• Section says TDS to be deducted @ 5% if Rental payment to  a resident exceeds Rs. 50000 per month
• No threshold : TDS applicable on full amount
• By Whom ? :
  • by Individuals or HUF to whom section 194I is not applicable. (Turnover or Prof services less than 1 Cr or 50 Lacs respectively)
• Time ? :
  • At the time of Credit or payment of last rent of the year (If tenancy terminates during the year, during such last month of tenancy)
• If PAN is not furnished, maximum TDS will be Rent of Last month
• The Buyer need not apply for TAN to deposit this TDS
• He has to deposit using his PAN

• A separate form 26QC has to be filed. It is a return cum challan. Once 26QC form is filed by the tenant, the owner gets the credit of the Tax which reflects in his 26AS
• The Tenant needs to create a Tax payer login on Traces site and issue a Form 16C to the Owner.

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