TDS on Sale of Property
TDS on sale of a property is applicable if a property value is more than 50 lacs. Filecrat offers an easy online process for filing TDS on Sale of Property from Rs.999/-
TDS on sale of property
Every person who is required to make a payment of Rs. 50 lakhs or more against purchase of an immovable property (other than rural agricultural land) is required to deduct tax at source at the rate of 1%. The amount is calculated on the sale consideration payable.
The tax should be deducted at the time of payment or credit in the books of accounts, whichever is earlier. The seller must be a resident of India.
Sale Consideration refers to the total amount paid for the purchase of the property. With effect from 1st September, 2019, sale consideration shall 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.
Where the sale consideration is paid through a number of instalments, tax shall be deducted from each such instalment. It should also be noted that TDS shall be calculated on the entire amount and not just the amount in excess of Rs. 50 lakhs.,/p>
Payment of tax
The tax deducted from the consideration must be paid to the credit of the Government within 30 days from the end of the month in which the tax is deducted.
The submission can be done with Permanent Account Number (PAN) of the buyer. The PAN of the seller is also to be furnished in the form along with the details of the property purchased.
The buyer is required to issue TDS Certificate in Form 16B to the seller after successful filing of Form 26QB. The Certificate can be downloaded from the TRACES portal. The certificate is usually available after a few days from filing of Form 26QB.
Points to be noted by the buyer
- A buyer does not need TAN to deduct tax.
- Furnishing of PAN of the buyer and the seller is mandatory.
- TDS must be deducted and deposited on time.
- Form 16B must be provided to the seller after filing of Form 26QB.
- Separate Form 26QB must be filed for each buyer-seller combination, i.e. where there are multiple buyers/ sellers of the same property, separate Form 26QB should be filed for each buyer-seller combination.
Points to be noted by the seller
- A seller must provide his PAN to be buyer
- A seller must check his Form 26AS to verify if TDS has been appropriately deducted and deposited by the seller.
- Filing of two Form 26QB
- Registration on TRACES portal
- Generation of Form 16B
- PAN, Address and Phone Number of Buyer
- PAN, Address and Phone Number of Seller
- Details of sale consideration paid
- Property purchase deed/ Details of property purchased
If the total sale consideration of the flat is Rs. 50 lakhs or more, then you need to deduct tax at the rate of 1% from each instalment paid as consideration.
The rate of TDS on sale of property is 1%. The amount should be deducted by the buyer at the time of making payment of consideration to the seller.
Yes. TDS on sale of property is applicable to all categories of buyers. Any buyer purchasing immovable property for Rs. 50 lakhs or more shall deduct TDS from the consideration paid to the seller.
Yes. Where the sale consideration of the immovable property is Rs. 50 lakhs or more, TDS should be deducted. It is irrelevant if the property is under-construction or completed.
Normally the TDS is to be deducted from the sale consideration paid to the seller. However, Finance Act, 2019 provides that consideration for transfer of immovable property will 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. This is applicable from 1st September, 2019.
TDS under section 194IA is not to be deducted in the following cases: -
- Where the immovable property purchased is rural agricultural land; or
- Where the total sale consideration is less than Rs. 50 lakhs.
- The seller is a non-resident. (In such case, Compliance of TDS provisions is different)
For TDS on sale of property, TAN is not necessary. Any person having a valid PAN (Permanent Account Number) can deduct tax from the sale consideration paid and deposit the same. The buyer needs to quote his PAN and the seller’s PAN at the time of filing Form 26QB.
Form 26QB is the online form available in the TIN-NSDL website for furnishing information regarding TDS on sale of property.
TDS must be paid to the credit of the Government within 30 days from the end of the month in which tax was deducted. The payment should be done online from the TIN-NSDL website through Form 26QB.
Yes. The total consideration is to be seen to determine whether TDS is applicable on not. In the given case, since the total consideration exceeds Rs. 50 lakhs, TDS shall be deducted from each instalment paid as consideration to the seller.
After filing Form 26QB, an acknowledgement is generated. The buyer needs to keep a copy of the acknowledgement. The buyer needs to provide a certificate of TDS to the seller in Form 16B. The certificate can be downloaded from the TRACES portal after successful filing of Form 26QB.
Form 16B is the certificate of TDS. It should be provided by the buyer of the property to the seller. The certificate stands as proof of deduction and deposit of TDS. Form 16B can be downloaded from the TRACES portal by the buyer after successful filing of Form 26QB.
Furnishing the PAN of the seller is mandatory. You can collect the same from the seller before effecting the transaction. PAN is usually mentioned in the deed of conveyance for transfer of immovable property.
Form 26QB is to be filed by each buyer with unique buyer-seller combination for respective shares. In the given case you and your spouse have to file two separate Form 26QB with your respective shares.
A buyer is required to file Form 26QB with unique buyer-seller combinations for each buyer and each seller. In the given case, you have to file a separate Form 26QB for each of the joint sellers stating their individual shares.
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