TDS ON SALE OF PROPERTY

January 25, 2016 by
Since June 1st 2013, when a buyer buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50lakhs, he has to deduct TDS when he pays the seller. The buyer has to deduct TDS at 1% of the total sale consideration. Note that the buyer is required to deduct TDS, not the seller.

WHO SHOULD DEDUCT TDS ON SALE OF PROPERTY?

According to rules in respect of tax deducted at source, buyer of the property would have to deduct the TDS and deposit the same in Government treasury.

WHEN TO DEDUCT TDS ON SALE OF PROPERTY?

If sale consideration of immovable property is more than Rs.50 Lacs then buyer of property have to deduct tax @1%. If installments are being paid TDS has to be deducted on each installment.

IS THE BUYER REQUIRED TO HAVE TAN NO?

Buyer or Purchaser of the property is NOT required to have Tax Deduction Account Number (TAN). The Buyer is required quote his or her PAN and sellers PAN.

tds1

IF AMOUNT OF PROPERTY SOLD IS 60 LACS, WOULD TDS BE CALCULATED AT 10 LACS OR ON 60 LACS?

TDS is to be deducted on the amount paid/credited to the seller. In this case, the deduction will be on total amount i.e. on 60 Lacs.

WHEN TO DEPOSIT TDS DEDUCTED?

This TDS has to be deposited along with Form 26QB within 7 days from the end of the month in which TDS was deducted.

HOW MUCH FORM TO BE FILED IF MORE THAN ONE BUYER OR SELLER?

Online statement cum Form 26QB is to be filled in by each buyer for unique buyer-seller combination for respective share. For example: in case of one buyer and two sellers, two forms have to be filled in and for two buyers and two seller, four forms have to be filled in for respective property shares.

HOW TO DOWNLOAD FORM 16B FROM TRACES?

After uploading Form 26QB you will get the acknowledgment number then after waits for 4-5 days. Now go to Traces website and register as a new user (if you have not registered yourself earlier) by entering your Validation details and download form 16B.