Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, April 18, 2016

TDS Notices, Defaults, Penalties, Interest and Online Correction on TRACES for 26QB – TDS on sale of Immoveable Property

TDS is applicable on transfer of Immovable property under section 194IA enacted by Finance Act 2013 where the consideration of property exceeds or is equal to 50 lacs. TDS Provisions for Property Sale/ Purchase above 50 Lacs are as under:

·         WEF 1st June, 2013 Tax @ 1% should be deducted by the buyer of the property at the time of making payment of sale consideration
·         For furnishing of Information of such transaction a 26QB form is to be filed online containing PAN of seller as well as buyer & Address, Transaction value and date of agreement for such transaction. In case of more than 2 buyers or sellers the Challan and Form 26QB will be filled in by all the buyers for respective sellers for their respective share.
·         Any sum so deducted under section 194 IA shall be required to be paid to the credit of the Central Government within a period of seven days from the end of the month in which the deduction is made either through Net Banking or through Authorized Bank Branches.
·         TDS certificate in Form 16B is required to be issued by the Buyer of property to the Seller, in respect of the taxes deducted and deposited in Govt Account.
·         Challan and Form 26QB will be filled in by all the buyers for respective sellers for their respective share.
·         If the person liable to deduct tax does not file 26QB and deposits the Tax Deducted in time will be treated as Assessee in default and shall be liable to pay Interest under section 201 of Income Tax Act,1961 before furnishing the Form 26QB
Ø  In case of TDS Deducted but Not paid in Time @1.5% for for every month or part of a month on the amount of such TDS from the date on which such TDS was deducted to the date on which such TDS is actually paid.
Ø  In Case TDS is not deducted @1% for every month or part of a month on the amount of such tax from the date on which such TDS was deductible to the date on which such TDS is deducted.
·         No filing or late filing of statement of TDS / TDS returns inForm 26QB the Assessee in Default shall be liable to pay late fees under section 234E .@ Rs 200 per day till the failure to file TDS statement continues with challan within a period of seven days from the end of the month in which the deduction is made.
·          It should be filed with challan within a period of seven days from the end of the month in which the deduction is made. Deductor will be liable to pay by way of fee of Rs 200 per day till the failure to file TDS statement continues.
·         The late filing fees shall be deposited before filing the TDS return in Form 26Q but the total fee cannot exceed the amount of TDS deductible for which statement was required to be filed filing fee.
·         No filing or late filing of statement of TDS / TDS returns in Form 26QB shall invite penalty under section 271H minimum Rs 10,000/- to Rs 1 lakh for not filing the TDS statement within one year from the specified date within which he was supposed to file the statement.
·         As Per section 271H penalty will be levied if the deductor/collector files an incorrect TDS return minimum penalty of Rs. 10,000 and maximum penalty of upto Rs. 1,00,000/-. In Case TDS return is filed without payment of Penalty under section 271H it may be levied on deductor by the assessing officer.
·         TRACES is sending two types of notices: i) Demand of interest payment in case TDS is  paid but interest is payable and ii) Demand of TDS and interest payment in case TDS is deducted or not deducted but not paid to the credit of the Central Government and TDS return in Form 26QB not filed.
Online Correction of 26QB
·         The CPC TDS released Online Correction facility for TDS statements filed in form 26QB, for TDS on transfer of Immovable Property where consideration exceeds Rs. 50 Lacs.
·         The TRACES has given now Online Correction facility for closure of the following TDS Defaults due to incorrect data entry in the 26QB statement.
Steps for online correction in 26QB
·         Register at Traces
·         Register your DSC
·         Make Correction in the following Fields : PAN of Buyer Details, PAN of Seller Details, Amount Paid/Credited, Date of Payment / Credit, Date of Tax Deduction, Financial Year & Details of Property
·         No DSC required for Corrections in the fields of email address, Mobile Number and Address of the Property.

In case a person does not have DSC then Assessing Officers’ Approval is required except for amendment in E Mail ID, Mobile and Address of the property.

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