TDS on payment under joint development agreement w.e.f. 01 April 2017



TDS on payment under joint development agreement w.e.f. 01 April 2017

As per Section 194-IC of Income Tax Act, 1961 (Inserted by the Finance Act, 2017, w.e.f. 1-4-2017 ) Any person responsible for paying to a resident any sum by way of consideration (not being consideration in kind) under a joint development agreement, is responsible for tax deduction under section 194-IC.



1. Who is responsible for tax deduction : Any person responsible for paying to a resident any sum by way of consideration (not being consideration in kind) under a joint development agreement, is responsible for tax deduction under section 194-IC.

·    2.Time of tax deduction– Tax is deductible at the time of credit of such sum to the account payee or at the time of payment thereof in cash or by issue a cheque/draft or any other mode, whichever is earlier.

·   3. Rate of deduction– Tax is deductible at the rate of 10 per cent. If PAN of recipient is not available, tax is deductible at the rate of 20 percent.

·    4. Threshold limit – NIL

·   5. Meaning of joint development agreement- It is a registered agreement in which a land owner (i.e, a person who owns land or building or both) agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share (being  land or building or both) in such project, whether with or without payment of part of the consideration in cash. 


Extract of section 194-IC of Income Tax Act, 1961 is given below for reference: 

Payment under specified agreement.

194-IC. Notwithstanding anything contained in section 194-IA, any person responsible for paying to a resident any sum by way of consideration, not being consideration in kind, under the agreement referred to in sub-section (5A) of section 45, shall at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon. ]

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16 thoughts on “TDS on payment under joint development agreement w.e.f. 01 April 2017

  1. In a JDA, 50% of consideration has been paid via chq. before applicability of section 194 IC i.e. before 1st April 2017. But the agreement (JDA) was registered after 1st April 2017. In that case whether TDS will be applicable on whole 100% consideration or only on balance 50% since first 50% was paid before levy of section 194IC?

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  2. IT IS NOT CLEAR IN WHICH TDS CHALLAN THE DEDUCTED TAX IS TO BE DEPOSITED LIKE AS MENTIONED IN SEC.194IA CH.NO.26QB,194IB CH.NO.26QC ETC.THERE IS NO MENTION OF THE CHALLAN NO.PL.SHARE IF ANY ONE HAS THE IDEA

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  5. Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act of 1961. Any payment covered under these provisions shall be paid after deducting a prescribed percentage. … Returns states the TDS deducted & paid to government during the Quarter TDS Interest!

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