Section 194(IA) came into force in 2013 and states that any individual who buys a property worth over INR 50 lakhs must deduct the appropriate TDS when paying the seller. The rate of TDS deduction in such cases is 1% of the amount to be paid.
Meanwhile, as per Section 194B, all individuals, and Hindu Undivided Families who do not fall under Section 44AB must deduct TDS for the payment of rent to an Indian homeowner. For this Act to be applicable, the rent aid must be greater than INR 50,000 per month. The payment of a lease, sub-lease, or tenancy in any of the following properties may be considered ‘rent’ under Section 194IB.
The payment of TDS must occur through Form 26QB. The TDS deposition should occur within a month of the last day of the month in which the sale took place. Once they deposit the TDS, they will receive Form 16B. Form 16B may be generated and downloaded through the TRACES portal. The buyer must then submit this form to the seller.
The TDS payment must be made similarly through Form 26QC, followed by the submission of Form 16C to the homeowner as per Section 194IB.
While in typical situations an individual requires a Tax Deduction Account Number for making TDS deductions, buyers do not need to obtain a TAN. However, they must provide the following details.
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