TDS on Property Purchase

IF YOU HAVE BOUGHT PROPERTY BUT HAVE NOT DEPOSITED TDS, YOU MAY GET A TAX NOTICE

If property worth more than Rs. 50 lakhs have been purchased and have not deduct tax at source (TDS) or failed to deposit the amount with the Income Tax Department, may have to pay a penalty of up to Rs. 1 lakh.

Section 194IA of Income Tax Act, 1961, states that for all transactions with effect from June 1, 2013, Tax @ 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration.

Covering: Residential property,

Commercial property, and

Land.

Exclusion:  Transactions pertaining to the purchase of agricultural land.

The buyer must deposit the TDS amount to the credit of the central government, within 30 days from end of the month in which the tax is so deducted.

Process for Payment:

For payment of the TDS and other details, buyer must fill in Form-cum-Challan No 26QB. If a property has more than one buyer and/or seller, separate Form 26QB for each set of buyer and seller needs to be filed. The details of all buyers and sellers must be submitted in each Form 26QB.

Responsible person for Deducting TDS: BUYER of the property.

The buyer should ensure that the PAN of the seller is correct. Otherwise, the seller will not be able to get the credit for tax deducted by the buyer, as the credit will flow based on PAN card details furnished in Form 26QB.

Whether Obtaining TAN is mandatory?

In case of TDS on immovable property, the buyer does not have to obtain TAN.

Details Required for filing Form 26QB:

·         Name,

·         Complete Address with pin code,

·          PAN,

·          Contact number and

·         Email id of both the buyer and seller.

·         Complete address of the property,

·         Date of Agreement,

·         Total Value of Consideration,

·         Installment amount, if any

·          Date of Payment

 -By Neha Garg