To pay TDS (Tax Deducted at Source) on a property purchase in India, follow these key steps:
When is TDS Applicable?
- TDS is applicable if the property purchase value exceeds ₹50 lakh.
- The buyer is responsible for deducting TDS at 1% of the total sale consideration.
- This applies to all immovable properties except agricultural land
Step-by-Step Process to Pay TDS on Property Purchase
- Verify Applicability and Seller Details
- Confirm the property value exceeds ₹50 lakh.
- Obtain the seller’s PAN and other details (address, contact).
- If the seller does not provide PAN, TDS rate increases to 20%
- Calculate TDS Amount
- Calculate 1% of the total sale price as TDS.
- If payment is in installments, deduct TDS proportionately on each installment
- Deduct TDS at the Time of Payment
- Deduct 1% TDS before making payment to the seller.
- Deposit TDS Using Form 26QB
- Visit the TIN-NSDL website and select Challan 26QB.
- Fill in buyer and seller details, property details, and TDS amount.
- Make the payment online via net banking or debit card.
- Save the acknowledgment receipt with the CIN (Challan Identification Number)
- Download Form 16B
- After payment, register or log in to the TRACES portal.
- Download Form 16B, the TDS certificate for the property buyer.
- Provide Form 16B to the seller as proof of TDS deduction
- File TDS Return
- File the TDS return within 30 days from the end of the month in which TDS was deducted.
- Ensure timely filing to avoid penalties
Additional Points
- If there are multiple buyers, TDS responsibility and payment are shared proportionately.
- TDS can be paid after property registration but must be within the stipulated time frame.
- Buyers do not need a TAN for this TDS deduction.
- Keep all receipts and documents for future reference and tax filing
This process ensures compliance with Section 194-IA of the Income Tax Act and helps avoid penalties related to TDS on property transactions
