Section 194IA of the Income Tax Act is the prescribed section that provides for deduction of TDS on the purchase of *immovable property by a resident taxpayer.
Form 26QB is the prescribed form that is required to be filed for purchasing or selling a property. Let us discuss in detail about who is required to pay TDS and what all are the steps involved for making payment of TDS.
Who is required to pay TDS on purchase of property?
Where the sale consideration of a property made from 01/04/2022 is Rs. 5 Lakhs or more than that, then the buyers are required to pay TDS i.e. Tax Deduction at Source at the rate of 1%. Also, the stamp duty shall also be applicable to be paid by the buyer.
However, as per the implication of Budget 2022, buyers are required to deduct TDS at the rate of 1 % even if the sale or purchase consideration of the property is less than the stamp duty value.
Here is the table containing some of the implications of TDS payment for purchase/sale of property
| SALE CONSIDERATION | SDV | IMPLICATION |
| Rs. 60 Lakhs | Rs. 70 Lakhs | Upto 31/03/2022 TDS is required to be deducted @1% on 60lacs. From 01/04/2022 TDS is required to be deducted @ 1% on 70lacs. The difference of 10lacs will be taxable in hands of buyer u/s 56(2)(vii) under head Income from Other Sources and Seller is required to calculate capital gains taking sale consideration 70lacs |
| Rs. 70 Lakhs | Rs. 60 Lakhs | TDS is required to be deducted @1% on 70lacs |
| Rs. 60 Lakhs | Rs. 60 Lakhs | TDS is required to be deducted @1% on 60lacs |
| Rs. 45 Lakhs | Rs. 55 Lakhs | Upto 31/03/2022 TDS is not required to be deducted as sale consideration does not exceeds 50lacs. From 01/04/2022, TDS is required to be deducted on 55lacs and other tax implications will also apply. |
| Rs. 45 Lakhs | Rs. 45 Lakhs | TDS is not required to be deducted as sale consideration/SDV is less than 50lacs |
Steps involved for making TDS on purchase of property
Step 1 : Login in to the Tax Information Network portal, by clicking on the link given here https://www.protean-tinpan.com/
Step 2 : The portal of Tax Information Number (TIN) Portal of the Income Tax Department will be opened. On the homepage, select the option named as “Services”.
Step 3 : The option of Services will further give many options, namely
- e-TDS/e-TCS
- Annual Information Return (AIR)
- TAN
- PAN
- OLTAS
- e-Payment : Pay Taxes Online
- e-Return Intermediary
- Online PAN Verification
- Form 24G
- Online AIN Registration
- Status of Tax Refunds
- TDS on Payments to Resident Contractors and Professionals
- Challan Status Inquiry
- TDS on Sale of Property
- Equalization Levy
- TDS on Rent of Property
From the options given, you need to select the option “e-Payment : Pay Taxes Online” option.
Step 4 : e-Payment of Taxes option will further provide you with various option and from there only you will find a heading named “TDS on Property (Form 26QB)”.Select and click on “Proceed”.
Step 5 : After proceeding with the option of making payment of TDS on sale/purchase of property, you will need to fill the complete form, the fields necessary to be filed are:-
- PAN of the seller and buyer
- Communication details of seller and buyer
- Property details
- Amount paid/ credited & tax deposit details
Step 6 : After filling the correct information as asked, submit the duly filed form to proceed. A confirmation message will be displayed which you need to confirm before making payment of TDS on property. After that, two options shall be given one as “Print Form 26QB” and another one as “Submit to the bank”.
A unique acknowledgment number is also displayed on the screen. It is advisable to save this acknowledgment number for future use.
Click on “Print Form 26QB” to print the form. Then click on “Submit to the bank” to make the required payment online through internet banking. Then proceed to the payment page through internet banking facility of various banks. For list of authorized banks, please refer https://onlineservices.tin.egov-nsdl.com/etaxnew/Authorizedbanks.html
Step 6 : On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.
Note:- The purchase of the property must keep in mind that TDS must be deducted on the occasions, whichever is earlier:-
- at the time of credit of such sum to the account of the transferor
- at the time of payment of such sum in cash or by the issue of a cheque or draft or by any other mode
With the 6-step guide, we come to an end of “How to pay TDS on purchase/sale of property?” containing the section covered of TDS payment, who is required to pay, how to pay TDS on purchase of property and when TDS is to be paid. So, Stay tuned with EAdvisors to get all the new and latest knowledge of the legal world. Providing our readers with the best and easiest of knowledge, we shall be posting more and more articles beneficial for you.
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*Immovable Property- includes any land (other than agricultural land) or any building or part of a building
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