No requirement to obtain TAN by transferee deducting tax under section 194-IA
Section 194-IA was proposed to be inserted by the Finance Bill, 2013 to provide for deduction of tax at source@1% on consideration for transfer of immovable property, other than agricultural land. However, no tax is to be deducted if the consideration for transfer of immovable property is less than Rs.50 lakhs.
Since this provision requires deduction of tax by the transferee, it presupposes that the transferee should have a TAN. This may cause genuine hardship to those transferees who do not possess a TAN. Further, it would be an additional burden to require such persons to apply for and obtain TAN for a single transaction.
To address this concern, sub-section (3) has now been inserted in section 194-IA to provide that provisions of section 203A containing the requirement of obtaining TAN, shall not apply to a person required to deduct tax in accordance with the provisions of section 194-IA.