TDS on Purchase of
Property - Section 194-IA
applicable from 1st June 2013)
Tax Department requires all property
buyers(transferee) to deduct tax @ 1% on payments made by
to the seller(transferor) towards purchase of property. Buyers
themselves aware of the process of payment of Tax deducted, time when
the tax should be
deducted from payments, how to issue TDS Certificate(Form
These provisions for TDS on purchase of property were introduced in the
year 2013 on 1st June.
A new section "Section 194 IA" of the Income Tax Act containing the
provisions for TDS on property purchase was inserted in the Act.
Here we have tried to explain the provisions and procedures
for TDS on property purchase by buyers. TDS is required to be deducted
if the value of property
is Rs. 50 lacs or
is required to deduct tax?
individual buying a property of Rs. 50 lacs or more must deduct TDS on
payments made (in lumpsum or in installment) for purchasing the
property. A buyer should deduct TDS @ 1% on
payments made for a property where purchase price is Rs. 50
Tax should be deducted at
the time of making payment of
or the whole of purchase consideration as the case may be. If any
advance payment is done for the purchase of property, tax should be
deducted at the time of advance payment.
For example if you are going
to make payment of an installment of Rs. 10,00,000 on 25th April 2014,
tax of Rs. 10,000 shall be deducted the same day ie. 25th April 2014
and you should pay the seller Rs. 9,90,000 (net of TDS)
limit to deposit Tax deducted:
from payments made to seller shall
be deposited to the
goverment treasury within 30 days from the end of the month of
deduction. We can also say that Tax should be deducted on the day of
payment itself and must be deposited within 30 days of the end of the
month of payment.
For example: if Rs. 10,000 tax is deducted on 25th April
2016, same shall be
deposited with the government account till 30th May 2016.
How to deposit Tax so deducted on property purchase?
here for Step by step guide on how to pay TDS on Property Purchase
shall be deposited to the government treasury by filling a challan cum
statement Form 26QB online, availble at TIN-nsdl website.
of TDS on purchase of property is to be made online by availing any one
of the following options:
- online using your net
- by filling the Form 26QB
and selecting the
option e-tax payment on
Now you should take the print out of the acknowledgement slip, and
any of the authorized banks for payment of TDS. Bank will make the
e-payment of tax and provide you the challan of tax payment.
sure to fill challan cum statement in Form 26QB correctly. However
a facility of online correction/rectification of any
error/mistake is introduced by log-in to TRACES but it is overall a
Facility for verification of status of TDS deposit is also available at
online services of TIN-nsdl.
How to issue TDS Certificate?
Certificate(Form 16B) is to be issued by the deductor of tax ie. buyer
of the property for the TDS. After few days of depositing TDS
the government account by filling in Form 26QB, deductor can download
the TDS Certificate(Form 16B) from the
website www.tdscpc.gov.in. Deductor first needs to register on the
website and then he can dowload Form 16B.
The buyer and seller both
can also view the details of TDS in
their 26AS. Details of tax deduction in 26AS are generally
available from the 3rd-4th day of deposit of tax to government account.
Have a querry or a feedback!! Do write to us at firstname.lastname@example.org!!
Some Quick links:
to deposit TDS on Property Purchase
to pay demand of TDS on Property Purchase
What is TDS?
TDS by Form 15G and Form 15H