To stay tuned with real estate updates

Procedure to pay TDS on purchase of property above Rs. 50 lakhs

Procedure to pay TDS on purchase of property above Rs. 50 lakhs

As informed you, the Central Board of Direct Taxes had notified the new provision of Tax Deducted at Source [“TDS”] on immovable property. The amendment is effective from June 1, 2013. With developers, builders, residential societies and associations starting up with the process, this article aims to provide you with procedure that is to be followed to pay the TDS.

The Amendment: Under the Finance Act 2013, the purchaser of an immovable property (any land or apartment or flat or building other than agricultural land) costing Rs. 50 lakhs or more is required to pay a withholding tax. The rate at which the tax is to be deducted is 1% of the amount paid. The new provision has been introduced by adding Section 194IA. The major objective behind the introduction of the new section is to track real estate transactions that are not being registered.

Procedure to follow the Amendment: E-Payment facilitates payment of TDS online. To avail this facility the buyer is required to have a net-banking account. Please follow the following steps to pay tax online:-

  • As the responsibility of deducting TDS on immovable property lies with the buyer, he/she will have to deposit the payment by filling up Form 26QB or “TDS on sale of property” form available at NSDL-TIN website.
  • The form has to be filled with PAN and complete address of the buyer and the seller; address of the subject immovable property; date of sale agreement and the value of the property that is for consideration.
  • Next, the buyer will also have to obtain a “challan” for the payment.
  • The TDS amount is to be electronically remitted into State Bank of India or any other authorized bank. The list of authorized banks can be referred to here. The payment can be made immediately or on a subsequent date.
  • On receipt of payment confirmation, a nine digit alpha numeric acknowledgment number would be generated, confirming the remittance of TDS & receipt thereof.
  • On successful payment, a “challan” will be generated containing CIN, payment details and bank.
  • Once a buyer makes a payment, he/she can download Form 16B from website of Centralized Processing Cell of TDS (CPC-TDS).
  • The buyer will be responsible to give the certificate of TDS in Form 16B to the seller within 15 days from the due date of submission of the “challan”. The seller will be thus enabled to claim credit for such TDS against tax liability.
  • It may kindly be noted that TDS liability u/s 194-IA lies exclusively on the buyer and the seller holds no liability or responsibility for the non-compliance of the same.

Finally please note that in case the buyer paid/remitted any payment on or after June 1, 2013 without deducting the TDS, he/she must separately deposit due TDS by filling up challan-cum-statement Form 26QB immediately and furnish the relevant certificate in Form 16B to the seller.

The Finance Minister has proposed that in order to have a reporting mechanism of transactions in the real estate sector and to collect tax at the earliest point of time, TDS should be applicable. This will widen the tax base and check tax avoidance measures. With the above steps, you can easily make the payment from the comfort of your home/office.

Tags: makaaniq, Legal

Where's My Share: Understanding Daughters' Right To Property

MakaanIQ explains women's right in their fathers’ properties.

Wed May 11 2016

+ Click Here To Read This Article

How To Prevent Property Co-Ownership Complications

MakaanIQ lists various complications related to co-ownership of a property.

Fri Apr 29 2016

+ Click Here To Read This Article

How To Avoid Delays In The Name of God?

Featured, Indian Contract Act, Force Majeure, Act of God, Real Estate, Delayed Possession, Developers

Mon Mar 28 2016

+ Click Here To Read This Article

What Is Adverse Possession?

An archaic law, the Limitation Act favoures trespassers over actual owners.

Thu Mar 10 2016

+ Click Here To Read This Article

What Is An English Mortgage?

MakaanIQ explains English Mortgage and how it is different from other forms of mortgages.

Tue Mar 01 2016

+ Click Here To Read This Article

Plan to Rent Your Place? You Must Know How Lease & Licence Are Different

MakaanIQ explains the legal difference between lease and licence, often used interchangeably in common parlance.

Fri Feb 19 2016

+ Click Here To Read This Article

Managing From Abroad: How Power Of Attorney Helps NRIs Manage Their Assets

MakaanIQ on how Power of Attorney helps NRIs manage their assets in the country of their origin.

Wed Feb 10 2016

+ Click Here To Read This Article

Smooth Inheritance: Where There's A Will There's A Way

MakaanIQ on why you should make a will in your lifetime.

Fri Feb 05 2016

+ Click Here To Read This Article

MakaanIQ shares more about these bio walls and how these can be used in your home.

MakaanIQ gives you an all-round perspective of both the cities to help you take the final call.

MakaanIQ lists some amazing ways to style the foot of the bed.

MakaanIQ lists seven such modern day architects that have been wowing the world with iconic...

MakaanIQ on how Power of Attorney helps NRIs manage their assets in the country of their origin.

A look at the benefits women home buyers get in India.

MakaanIQ lists tips that would come handy when planning a galley kitchen in your home.

A townhouse is essentially a terracedNorth American home with a narrow façade but a taller frame....

MakaanIQ lists four reasons why laminate flooring is a perfect option if you are planning to give...

MakaanIQ gives you some tips on settling in your new address and breaking the ice with your...

Subscribe Now

To stay tuned with real estate updates.


x +

Drop Your Query here