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TDS On Sale Of Immovable Property(From 26QB)

For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called as “Tax Deducted at Source”, commonly known as TDS.

The Finance Act 2013-14 introduced TDS on Payment on transfer of certain immovable property other than agricultural land at the rate of 1% where the consideration for the transfer of an immovable property is Rs.50 Lakhs or above u/s 194IA.

In respect of payments on sale of property:

  • The buyer of the property should furnish all details regarding the transaction of sale and TDS on Property in Form 26QB and this Form 26QB is required to be submitted at the time of payment.
  • After depositing the TDS, the buyer of the property would also be required to issue Form 16B to the Seller of the property in respect of the TDS deducted and deposited with the government.

Points to be remembered by the Purchaser of the Property:

  • Deduct tax @ 1% from the sale consideration value.
  • Collect the Permanent Account Number (PAN) of the Seller.
  • All information regarding the sale transaction.
  • File the TDS return with Government.

Points to be remembered by the Seller of the Property:

  • Provide your PAN to the Purchaser for furnishing information regarding TDS to the Income Tax Department.
  • Verify deposit of taxes deducted by the Purchaser in your Form 26AS Annual Tax Statement.
  • Collect Form 16B from Buyer and compare the value of TDS actually deducted at the time of transaction against 26AS & 16B

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