TDS on Property Purchase

Unlocking the Secrets of TDS on Property Purchase

TDS on Property Purchase: Everything You Need to Know

Tax deduction at source (TDS) is a system in which the person making a payment (deductor) is required to deduct tax at source and deposit it with the government on behalf of the person receiving the payment (deductee). TDS is applicable on a variety of payments, including property purchase.

TDS on Property Purchase

How much TDS on property purchase?

The rate of TDS on property purchase is 1% or .75% of the sale consideration, However, if the seller does not provide their PAN to the buyer, the buyer is required to deduct TDS at a higher rate of 20%.

Everything You Need to Know

Tax deduction at source (TDS) is a system in which the person making a payment (deductor) is required to deduct tax at source and deposit it with the government on behalf of the person receiving the payment (deductee). TDS is applicable on a variety of payments, including property purchase.

Who is responsible for deducting TDS on property purchase?

If the value of the property is Rs. 50 lakh or more, the buyer is responsible for subtracting TDS from the purchase price. TDS is charged at a rate of 1%, but if the seller does not give the buyer access to their PAN, the buyer must charge TDS at a higher rate of 20%. When paying the seller, the buyer must deduct TDS, and then deposit it on Form 26QB with the government.

Liability of deposit TDS on property purchase?

To deduct and deposit TDS before property purchase registration, the buyer needs to follow these steps:

Obtain the PAN of the seller.

Calculate the TDS by multiplying the property purchase price by 1% or .75%.

Deduct the TDS from the property purchase price and pay the remaining amount to the seller.

Deposit the TDS with the government using Form 26QB.

Form 26QB

Form 26QB is an online form that can be used to deposit TDS on property purchase. The buyer can access the form on the website of the National Securities Depository Limited (NSDL).

To fill in Form 26QB, the buyer will need to provide the following information:

PAN of the buyer and seller

Property details

Amount paid/credited and tax deposit details

Once the form is filled in, the buyer needs to make the payment of TDS using a net banking account or debit/credit card on the other hand to make this process simple and easy just appoint a Charted Accountant that do it within 20 min & all Done.

Downloading Form 16B

After depositing the TDS, the buyer can download Form 16B from the TRACES portal. Form 16B is a certificate that shows the amount of TDS deducted by the buyer and deposited with the government.

The buyer needs to provide Form 16B to the seller so that the seller can claim credit for the TDS deducted in their income tax return.

Conclusion

TDS on property purchase is a simple process that can be completed by following the steps outlined above. By deducting and depositing TDS on time, the buyer can avoid any penalties from the income tax department.