What is TDS on Property?

TDS on Property refers to the Tax Deducted at Source (TDS) on the purchase of immovable property. The buyer is responsible for deducting a pre-determined percentage of tax from the payment made to the seller, which is then deposited with the government on the seller’s behalf.

Who is Responsible for TDS on Property?

• Buyer: The buyer is responsible for deducting TDS at the time of making the payment for the property.
• Seller: The seller must provide their PAN details to the buyer to ensure correct TDS deduction.

When is TDS on Property Applicable?

• Threshold Limit: TDS applies only when the sale consideration of the property exceeds ₹50 lakh.
• Type of Property: It applies to both residential and commercial properties.
• Payments Covered: It applies to all payments related to the property purchase, including advances, full payments, and installments.

What is the Rate of TDS on Property?

• Current Rate: The standard rate of TDS is 1% of the sale consideration.
• Special Case: If the seller does not provide their PAN, the TDS rate increases to 20%.

How to File TDS on Property?

1. Deduct TDS: Calculate and deduct the applicable TDS based on the sale consideration (1% or 20%).
2. Submit Form 26QB: File Form 26QB electronically within 15 days from the month of deduction via the TIN website.
3. Deposit the Deducted Amount: Pay the deducted TDS to the government through authorized banks.
4. Issue TDS Certificate: After the payment, generate Form 16B and issue it to the seller, showing the tax deducted and deposited.

Consequences of Non-Compliance:

• Buyer: A penalty of 1% per month on the deducted amount for delayed filing.
• Seller: Interest at 1% per month on the tax payable from the due date.

Additional Points:

• It’s advisable to consult a tax professional for guidance on TDS on property transactions.
• Keep all documents related to the property purchase and TDS deduction for future reference.
• Use online resources provided by the tax authorities to simplify filing and compliance.

You can also take expert service from Company corpo for further assistance.