TDS ON SALE OF PROPERTY

TDS on sale of a property (SEC 194IA).

TDS to be paid on amount received from a sale of a property:

• A person who is purchasing non-agricultural property from a resident person is required to deduct TDS @ 1% from the purchase amount of the property.
• If the property value is less than Rs. 50 lakhs then TDS is not required to be deducted.
• All type of property, whether house property or commercial property, are covered under this section except agricultural land.
• TDS should be deducted on the total amount paid to the seller excluding taxes.

Is TDS number is mandatory for TDS deduction u/s section 194IA

• A buyer of property is not required TDS Number for deducting TDS under section 194IA.
• A buyer can directly pay TDS using his PAN number and can generate form 16B through TDS traces site to be given to seller.

Due date for payments of tax deducted

TDS on property should be deducted by the buyer at the time of making payment and has to be deposited within 7 days from the end of the month.

What is form 26QB?

26QB form or challan contain all the details of transaction, such as details of property, Pan Numbers of parties and the amount of TDS deducted.

• Pan Card of both buyer and seller is mandatory for filing of 26QB.
• Without these details Form 26QB cannot be filed and challan deposited.
• In case of seller do not have the pan card then TDS should be deducted @ 20%.

TDS on payment to seller whether in instalments or lump sum

• If any advance payments are made to the seller of the property, TDS should be deducted on those advance payments also.
• If the amount is paid in instalments to the seller then on each instalment TDS should be deducted if the purchase value of property exceeds 50 Lakhs.
• If the amount is paid in lump sum to the seller then on this paid amount TDS should be deducted if the purchase value of property exceeds 50 Lakhs.

What happened if more than 1 buyer and 1 seller?

If there are more than one buyer and one seller, form 26QB is to be filed for each buyer seller combination. In case of 2 buyers and 2 sellers, four forms have to be submitted having details of buyer and seller combinations.