TDS on property, also known as TDS on sale of property, refers to the tax that is deducted at source on the sale of immovable property in India. The term “TDS” stands for Tax Deducted at Source, which is a system introduced by the Indian government to collect taxes at the source of income.
According to the provisions of the Finance Bill 2013, if a buyer purchases an immovable property (excluding rural agricultural land) worth more than INR 50 lakhs, they are required to deduct 1% of the consideration payable to the resident transferor as TDS on property. The TDS so collected must be deposited with the Indian government within a specified time frame, usually within 7 days from the date of deduction.
1. What is TDS on Property?
The Finance Bill 2013 has proposed that buyers of an immovable property (excluding rural agricultural land) worth 50 lakhs or more must pay a 1% withholding tax on the consideration payable to the resident transferor.
2. Who is responsible for deducting TDS on the sale of Property?
According to the TDS rules, the buyer of the property must deduct the TDS and deposit it in the government treasury.
3. Do I, as a buyer, need to obtain a TAN to report TDS on the sale of Property?
The buyer of the property is not required to obtain a Tax Deduction Account Number (TAN). The buyer must provide their PAN and the seller’s PAN.
4. What if I don’t have the seller’s PAN, Is it mandatory?
The seller’s PAN is mandatory and can be obtained from the seller before the transaction.
5. How can I use the facility to pay TDS on the sale of Property?
The buyer of the property (the deductor of tax) must furnish information about the transaction online on the TIN website (www.tin-nsdl.com). After providing the transaction details, the buyer can either:
make the payment online immediately through the e-tax payment option,
or make the payment later through the e-tax payment option (using their net-banking account) or by visiting an authorized bank branch. The bank will make the e-payment without digitizing the challan and will get the challan details from the online form filled on the TIN website.
6. What should I do if I encounter an error on the Protean website while entering the online form details?
If any problems are encountered on the Protean website while entering the details in the online form, contact the TIN Call Center at 020-27218080 or write to them with the subject “Online Payment of Direct Tax_ TDS on sale of property.”
7. What is Form 26QB?
Form 26QB is the online form available on the TIN website for providing information about TDS on property.
8. I have filled Form 26QB and made the payment online, but I forgot to save the Acknowledgment Number generated at the TIN website. How can I get the Acknowledgment Number?
The acknowledgment number for Form 26QB can be found in the Form 26AS (Annual Tax Statement) of the deductor (i.e., the buyer/purchaser of the property) on the TRACES website (www.tdscpc.gov.in). The taxpayer can also retrieve the acknowledgment number by clicking the “View Acknowledgment” option on the TIN website and entering the buyer’s and seller’s PAN, the total payment, and the assessment year as specified at the time of filing Form 26QB.
9. What is Form 16B?
Form 16B is the TDS certificate issued by the deductor (the buyer of the property) to the deductee (the seller of the property) for the taxes deducted and deposited into the government account.
10. Where can I get Form 16B?
Form 16B can be downloaded from the Centralized Processing Cell of TDS (CPC-TDS) website (www.tdscpc.gov.in).
11. How can I obtain Form 16B?
As a buyer, how do I determine if I should deduct TDS on property from the amount exceeding 50 Lakhs or on the entire amount of the property sold? For example, if the property sold is worth 70 Lakhs, would TDS be calculated on 20 Lakhs or 70 Lakhs?
TDS must be deducted on the amount paid/credited to the seller. In this case, TDS would be calculated on the entire amount of Rs.70 Lakhs.
12. Can I pay for TDS through cash or cheques at banks?
The buyer can approach an authorized bank branch to assist with making e-payments.
13. If I have filled Form 26QB as a buyer and selected the option for e-payment at a later date, how will the payment made within the permissible period be linked to Form 26QB?
The e-payment of taxes at a later date will be linked to Form 26QB based on the acknowledgement number generated at the time of filing the form.
14. How should transactions involving multiple parties (more than one buyer/seller) be filed in Form 26QB?
Each buyer must fill out an online statement-cum-challan form (Form 26QB) for each unique buyer-seller combination for their respective share. For example, if there is one buyer and two sellers, two forms must be filled out and for two buyers and two sellers, four forms must be filled out for their respective property shares.
15. What is the fee in Form 26QB and when is it applicable?
According to section 234E of the IT Act, 1961 and Rule 31A (4A) of the IT rules, 1962, a fee will be levied if the taxpayer fails to electronically file the challan-cum-statement in Form 26QB within seven days from the end of the month in which the tax was deducted. The fee will be paid by the buyer/transferee/payer.
16. How can I make a tax payment for the fee in Form 26QB?
The provision to enter the tax amount (including basic tax, interest, and fee) in Form 26QB is available on the TIN website and the bank’s site.
17. If I have entered the tax amount for the fee but am unable to generate Form 16B from the TRACES website, what should I do?
The TDS amount as per Form 26QB should be entered as the ‘Basic Tax’ (Income Tax) on the bank’s web portal as the TDS certificate (Form 16B) will be based on the ‘Basic Tax’ (Income Tax) only.
