GODREJ PROPERTIES LIMITED

Applicability of TDS on payment on transfer of certain immovable property

other than agricultural land – Section194IA of the Income Tax Act, 1961 (the
Act)

Finance Act 2013 has inserted section 194IA whereby any payment made on or after
01.06.2013, for acquisition of any immovable property other than agricultural land is
subject to TDS @ 1% where the aggregate consideration is equal to or more than
Rs. 50 Lac.

Unit buyer has to deduct tax at source at the time of actual payment or credit of such
sum to the account of the transferor / seller, whichever is earlier.

TDS is required to be deducted in respect of any payment due or made on or after

01.06.2013, even if the agreement is made / invoice is raised prior to 01.06.2013.

TDS has to be deducted on the Gross Invoice Value including the amount of taxes if
any, excluding service tax portion separately shown in the invoice as per CBDT
circular No.1 dated 13 January 2014. This is because TDS is applicable on “any sum
paid by way of consideration”.

For our south projects where the agreement is divided into two parts viz. Sale of
undivided share of land and construction contract, there also TDS is required to be
deducted as per the provisions of section 194IA only. It is possible that tax was earlier
being deducted under section 194C on the construction contract by certain assesses
but now it is advisable if all deductions are made under section 194IA.

While making payment to us Customer is required to intimate us the amount of Tax

deducted by him and he / she should furnish the signed TDS certificate in prescribed
Form No 16B within 15 days from the due date of payment of TDS. We should
account for “TDS on receipt” only on receipt of intimation of TDS deduction / on
receipt of TDS Certificate from the customer.

Once the certificate is received we shall check the credit appearing in the Form 26As
of the Company. In case of any discrepancy, we shall inform you and the concerned
branch will have to immediately deal with the customer and rectify the matter before
the next instalment is received.

TDS has to be deducted on the entire amount paid as consideration for acquisition of
property. However pass through payments made to the seller viz. Maintenance
Charges, Share Money, Corpus Fund, any other pass through Government / other
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 payment shall not be subjected to TDS. It is preferable if separate invoices for such
charges are raised on the customers.

In case the customer has availed the Bank Loan on property than the Bank has to
comply with TDS requirement on behalf of the customer and in case the bank is
unable to comply with the requirement than the customer has to ensure that he / she
complies with the TDS requirements.

In case the property is purchased in joint names, than the person who is actually
making the payment has to comply with TDS requirements. In case both parties are
making the payment then the TDS requirements are to be fulfilled by both parties.

PROCESS FOR PAYMENT OF TDS

TDS deducted during a particular month has to be paid by 7th of next month.

The amount of TDS deducted has to be paid electronically ONLY using Form No.
26QB. Manual payments by using any other tax challan are not permitted under any
circumstances.

List of Authorised Banks through which electronic payment of tax can be made is
attached herewith as Annexure – I.

The e-payment form is available on the TIN-NSDL website.

To access the form, the user has to visit www.tin-nsdl.com website. On the top left hand
side, select the option “Services”. Under this, select the last option “e-payment: pay
tax online”. This will take you to a new page. There select “TDS on sale of property”.

The prescribed form 26QB (copy attached) will appear. Fill in the required details.
The provision to make the payment is included in this challan. No separate e-tds
return needs to be filed for this tax deduction.

Every person responsible for deduction of tax under section 194IA of the Act shall
furnish the certificate of deduction of tax at source in Form No.16B to the payee
within fifteen days from the due date for furnishing the challan-cum-statement in
Form No. 26QB.

Form 16B is to be generated online from the web portal within 15 days from the due
date of deposit and must be downloaded from the TDSCPC website. Once the
certificate is downloaded, it must be signed and stamped and then sent to the
Transferror / Seller.

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Few important instruction for filling up Form 26QB while making the online payment
of TDS:

While selecting the Tax applicable please select “(0020) Income- tax on Companies
(Corporation Tax)” in case payment is made by Company.

While selecting the Tax applicable please select “(0021) Income- tax (Other than
Companies)” in case payment is made by person other than Company.

In the attached Form 26QB under the heading PROPERTY DETAILS – under
Column - Total Value of Consideration (Property Value) – Please mention total
consideration including the amount of applicable taxes for the property being
purchased. Pass Through payments viz. Maintenance Charges, Share Money,
Corpus Fund, any other pass through government payment should not be included in
Total Value of Consideration.

The actual payment being made should also be computed accordingly and Pass
through Payments should not be included.

In the attached Form 26QB “Mode of Payment” is required to be mentioned. In case

buyer / customer is paying the TDS amount immediately using net banking facility
than the buyer / customer should chose option “e-tax payment immediately” and in
case the buyer / customer is paying the TDS amount subsequently by visiting any of
the Bank branches than the buyer / customer should chose option “e-tax payment on
subsequent date”.

Information required form our side for filing up Form 26QB is as under:

Name of the Payee / Seller :

PAN No of the Payee / Seller :

Address of the Payee / Seller :

Tax Applicable :

Customers are requested to quote their customer code no on the back of the TDS
Certificate provided to us.

Please note that in case you require any information / clarifications, we request
you to please approach us.

Annexure I - List of Authorised Banks.

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Sr. No. Name of the Bank

1 Allahabad Bank

2 Andhra Bank

3 Axis Bank

4 Bank of Baroda

5 Bank of India

6 Bank of Maharashtra

7 Canara Bank

8 Central Bank of India

9 Corporation Bank

10 Dena Bank

11 HDFC Bank

12 ICICI Bank

13 IDBI Bank

14 Indian Bank

15 Indian Overseas Bank

16 Jammu & Kashmir Bank

17 Oriental Bank of Commerce

18 Punjab and Sind Bank

19 Punjab National Bank

20 State Bank of Bikaner & Jaipur

21 State Bank of Hyderabad

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22 State Bank of India

23 State Bank of Mysore

24 State Bank of Patiala

25 State Bank of Travancore

26 Syndicate Bank

27 UCO Bank

28 Union Bank of India

29 United Bank of India

30 Vijaya Bank

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