For TDS u/s 194IA consideration to include charges paid for all amenities

For TDS u/s 194IA consideration to include charges for all amenities

Section 194-IA of the Act relates to payment on transfer of certain immovable property other than agricultural land and provides for levy of TDS at the rate of one per cent. on the amount of consideration paid or credited for transfer of such property.

However, the term ‘consideration for immovable property’ is presently not defined for the purposes of this section.

The transaction involving purchase of immovable property, there are several other types of payments apart from the sales consideration which the buyer is contractually bound to make such payments to the builder/seller, either under the same agreement or under a different agreement.

Some of such payments are those for rights to amenities like club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee etc.

For TDS u/s 194IA consideration to include charges for all amenities

The Union Budget 2019-20 has proposed to amend the Explanation to Section 194IA to provide that the term “consideration for immovable property” shall include all charges of the nature of club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee or any other charges of similar nature, which are incidental
to transfer of the immovable property.

This amendment will take effect from 1st September, 2019.