From 1st June 2013 through section 194IA of Income Tax Act a provision was rolled out by Mr. P Chidambaram to deduct 1% TDS on sale of the property to a resident IndianThe property here includes every immovable property like
And all such other properties except agricultural land. To the relief of citizens, TDS needs to be done only on the transactions where sale proceeds are of ? 50,00,000 (Fifty Lakhs) or more.
The tax @1% needs to be deducted by the buyer at the time of making payment to the seller. And, the seller shall be entitled to receive only the net amount. For eg say the property is sold by Mr. A to Mr. B for ? 60,00,000. In this case, Section 194IA shall apply as under
|Sale Value of Property||? 60,00,000|
|Less: Tax Deducted at Source by B u/s 194IA (@ 1% of ? 60,00,000)||? 60,000|
|Net Amount Payable to Mr A||? 59,40,000|
The amount of ? 60,000 (Sixty Thousand) deducted as TDS by Mr.B shall be deposited to the government within 7days of next month in challan Form 26QB (TDS on Property).
To generate Form 26QB or make an online payment follow this process
TDS so deducted will reflect in Form 26AS Part F, as shown in the image below
The Buyer Mr. B in our case shall also give Certificate of TDS so Deducted in Form 16B to the seller Mr. A. To generate Form 16B certificate follow these steps
TDS under Section 194IA needs to be deducted on transaction value and not on value inclusive of applicable taxes. Say, the property is sold at ? 60,00,000 and GST applicable on it is ? 6,00,000. In this case the TDS u/s 194IA would be deducted on ? 60,00,000 and not on ? 66,00,000.
TDS rule was brought to effect so as to keep a track of transactions of sale and purchase in real estate. As it is a highly speculative market where transactions are done a party in cash and partly through baking channels.
To know more about TDS on sale of the property toNRIand all FAQ’s on TDS on sale of property read our series of blogs.
Ans. Taxpayer will be liable to pay Penalty Rs. 100000/-
Ans. It can be generated by login into Traces site.
Ans. Buyer has to deduct TDS on payment of consideration to the seller.
Ans. TDS on the entire amount of consideration if property value exceeding Rs. 50 lakh.
Ans. Neither the buyer, nor the seller is required to procure the TAN for making TDS payment on the purchase of immovable property.
Ans. The seller(s)’s PAN is mandatory for deducting TDS and filing Form 26QB.You are required to take selers PAN before hand.
Ans. Visit NSDL site , then choose TDS on sale of property after that fill all the details , make payment and take a print of Form 26QB generated and submitted to the bank.
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