Changes In TDS Provisions in Finance Bill 2019

TDS provisions: Section 194N (new section): TDS on Cash Withdrawal exceeding Rs 1 crore from banks or cooperative bank or post office (Applicable w.e.f. 01/09/2019)

             With a view to encourage the cashless economy, it is proposed to insert a new section 194N in the Act to provide for levy of TDS @ 2% on cash payments in excess of Rs. 1 crore in aggregate made during the year, by a banking company or co-operative bank or post office, to any person from an account maintained by the recipient. Exemption from this provision would be granted to certain recipients such as the Government, banking company, cooperative society engaged in carrying on the business of banking, post office, banking correspondents and white label ATM operators, who are involved in the handling of substantial amounts of cash as a part of their business operation. Central government would be empowered to grant such exemption to more recipients by the way of Gazette Notification

TDS Provisions under Section 194IA: TDS on payment of transfer of immovable property (Applicable w.e.f. 01/09/2019)

   Section 194IA relates to levy of TDS on transfer of certain immovable property other than agriculture land. Presently, the term “Consideration for Immovable Property” is not defined in the act for the purposes of this section. It is noted that in the transaction involving purchase of immovable property, there are other types of payments made besides the sales consideration and 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.

Through Budget 2019, the term “Consideration for Immovable Property” is proposed to be defined as to include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property. So, matter is very clear now whether separate agreement is made for such facilities or not.