Overview of Section 194-IA and 43CA

ASHOK SETH, LucknowB. Sc, FCA, DISA (ICA)

as@sethspro.com

Sec 194-IA (w.e.f 1st June 2013 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),

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Sec 194-IA Clause (1) Contd. shall, 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,

deduct an amount equal to one per cent of such sum as income-tax thereon.

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No Deduction IF & No TAN Required No deduction if consideration (Actual

not deemed u/s 50-C) for the transfer of an immovable property is less than 50 L rupees.

NO TAN is required by deductor However- PAN of Transferee and

Transferor both are required IF NO PAN OF seller- TDS 20% u/s

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Definitions (a)"agricultural land" means

agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of s 2;

(b)"immovable property" means any land (other than agricultural land) or any building or part of a building.

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CBDT Notification Dt. 31st May 2013- amending the rules Rule 30(2A)- TDS to be paid within

seven days from the end of the month in which deduction made.

Challan cum statement 26QB Rule 30(6A)- Payment only

electronically.

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Procedures- Contd. Rule 31(3A)- Person responsible for

deduction to furnish certificate in form 16B within 15days from due date of 26QB

The certificate to be generated and downloaded from web portal

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Issues- Whether TDS deductible ? On payments made before 1st June is

total consideration is > 50 Lacs but payment due after 1st June 2013 is less than 50 Lacs

For payments made to LDA or Avas & Vikas etc. also

If Actual consideration is 45 Lacs and valuation u/s 50C is 55 Lacs

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Issues there may be instances where the

payments have been made in full but the possession not delivered and registration also not done- Problem of Registrar ?

Can TDS be deposited by builder on behalf of buyer

TDS on Basic value or on Service Tax amount also.

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Issues whether it is applicable on basic sales

price or including the value of all amenities? E.g. car parking, preferential charges, plus club membership, external development charges etc. which buildercharges from customer as a part of Flat purchase

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Issues If a buyer pays the balance amount

say 10 Lacs in instalments or otherwise after registration can this be called to be payment “consideration for transfer”

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Issues If there are two Joint transferee “A” &

“B” and 3 Joint Transferor “X”, “Y” and “Z” for total consideration of say 90 Lacs Should TDS be deducted If in above example consideration is 135

Lacs then? In second example above how many

challan Cum statements ?13th June 2013 CA Ashok Seth 12

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QUESTIONS ON THIS TOPIC ?

Section 43CA Inserted by Finance ACT 2013 w.e.f. 1st April 2014 i.e. Asstt Yr. 2014-

15 Effective from Current Financial Year

2013-14

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Section 43CA(1) Where consideration as a result of the

transfer of an asset (other than a capital asset), being land or building or both, is < than value adopted or assessed or assessable by an authority for the purpose of payment of stamp duty, the value so assessed shall, be deemed to be the full value of the consideration

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Section 43CA(2) The provisions of sub-section (2) and

sub-section (3) of section 50C shall, so far as may be, apply in relation to determination of the value adopted or assessed or assessable under sub-section (1).

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Section 43CA(3) Where the date of agreement fixing

the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub-section (1) may be taken as the value assessable on the date of the agreement.

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Section 43CA(4) The provisions of sub-section (3) shall

apply only in a case where the amount of consideration or a part thereof has been received by any mode other than cash on or before the date of agreement for transfer of the asset.

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