section 194IA

[Suman Jain]

Dear All

 

As all of you know that a new section 1941A has been introduced. Can you please share your opinion that whether this section is applicable at the time of transfer or even earlier also when a real estate company enters into an agreement for property with buyer which is still to be constructed.

 

Section:

After section 194-I of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2013, namely :—

‘194-IA. Payment on transfer of certain immovable property other than agricultural land.—(1) 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, 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.

(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees.

Explanation.—For the purposes of this section,—

(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 section 2 ;

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

Clause 42 of the Bill seeks to insert a new section 194-IA in the Income-tax Act relating to payment on transfer of certain immovable property other than agricultural land.

It is proposed to insert a new section 194-IA to provide 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 per cent. 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 issue of cheque or draft or by any other mode, whichever is earlier.

It is further proposed to provide that no deduction shall be made where consideration for the transfer of an immovable property is less than fifty lakh rupees.

It is also proposed to provide an Explanation defining the expressions "agricultural land" and "immovable property".

This amendment will take effect from 1st June, 2013.

Please suggest whether tax is to be deducted at time of credit/payment or transfer.


--
With regards

Suman Jain

[lamba prem]

pls see my website its premlamba.com

see the defination of transfer

its at the time of registration of im prop

--
You received this message because you are subscribed to the Google Groups "MBF Delhi 2nd Batch" group.
To unsubscribe from this group and stop receiving emails from it, send an email to mbf-delhi-2nd-b...@googlegroups.com.
For more options, visit https://groups.google.com/groups/opt_out.
 
 

--
 Regards,

 Prem Lamba, FCA, LL.B, MBF

Cell # 9810616836

www.premlamba.com

[saraswa...@gmail.com]

As far as interpretation is concerned, it has to be done at the time of payment, credit to account is written for bank transfer, cheque / draft etc denotes payment mode only. The intent of law is to tax this payment, which can be made by a person who might not be maintaining books of accounts, and hence the fundamental is not kept restricted to making credit by way of an entry and more so on the payment to the person who is the transferor.

Regards,
Aayush Saraswat

-----Original message-----
From: Suman Jain
Sent: 18/07/2013, 4:56 PM
To: mbf-delhi...@googlegroups.com; mbfmumbai
Subject: section 194IA


Dear All

As all of you know that a new section 1941A has been introduced. Can you
please share your opinion that whether this section is applicable at the
time of transfer or even earlier also when a real estate company enters
into an agreement for property with buyer which is still to be constructed.

Section:
After section 194-I of the Income-tax Act, the following section shall be
inserted with effect from the 1st day of June, 2013, namely :—

‘*194-IA. Payment on transfer of certain immovable property other than
agricultural land.*—(1) 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, 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.

(2) No deduction under sub-section (1) shall be made where the
consideration for the transfer of an immovable property is less than fifty
lakh rupees.

*Explanation*.—For the purposes of this section,—

(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 section 2 ;

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

*Clause 42* of the Bill seeks to insert a new section 194-IA in the

Income-tax Act relating to payment on transfer of certain immovable
property other than agricultural land.

It is proposed to insert a new section 194-IA to provide 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 per cent. 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 issue of
cheque or draft or by any other mode, whichever is earlier.

It is further proposed to provide that no deduction shall be made where
consideration for the transfer of an immovable property is less than fifty
lakh rupees.

It is also proposed to provide an *Explanation* defining the expressions