TDS on Sale of Property – Sec 194IA

When a buyer(transferee) buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50lakhs, he has to deduct TDS an amount equal to 1% of such sum when he pays the resident seller(transferor).

Is TAN required to report the TDS on Rent of property?

Buyer or Purchaser of the property is not required to procure Tax Deduction Account Number (TAN). The Buyer is required quote his or her PAN and sellers PAN.

How to pay taxes?

The Buyer of the property (deductor of tax) has to furnish information regarding the transaction online on the TIN website i.e. www.tin-nsdl.com After successfully providing details of transaction deductor can:

  1. Either make the payment online (through e-tax payment option) immediately;
  2. Or make the payment subsequently through e-tax payment option (net-banking account) or by visiting any of the authorized Bank branches. However, such bank branches will make e-payment without digitization of any challan. The bank will get the challan details from the online form filled on TIN website (www.tin-nsdl.com)  

How to File Form 26QB – TDS on Sale of Property?

  1. Go to https://www.tin-nsdl.com/
  2. Select “All About TDS on sale of property.”
  3. Select “Online form for furnishing TDS on property (Form 26QB)”
  4. Select Form 26QB.
  5. Select ‘0020’ if you are corporate payer and ‘0021’ if you are a non-corporate payer.
  6. Select Tax applicable for which payment is to be done.
  7. Mention PAN of Transferee/Buyer and Transferor/Seller.
  8. Re-enter PAN of Transferee/Buyer and Transferor/Seller.
  9. Provide complete address of Transferee/Buyer and Transferor/Seller.
  10. Provide complete address of Property transferred.
  11. Mention the date of Agreement/Booking of property.
  12. Mention the Total value of consideration (Property Value).
  13. Mention if the above payment is done in Lump sum or in Installments.
  14. Please select the amount paid/credited (Enter the amount paid to the Transferor/Seller).
  15. Please enter the TDS amount to be paid (amount deducted by the purchaser at the time of purchase of the property).
  16. Select the option for “e-tax payment immediately” if you want to pay taxes through your net banking account.
  17. Select the option for “e-tax payment on subsequent date (e-payment of taxes by visiting any of the Bank branches)” if you do wish to pay the taxes by cheque or manual mode.”
  18. On proceed, confirmation page is displayed to verify the details entered
  19. If all the above detail including the name displayed (as per ITD) is correct then, click on “SUBMIT” button.
  20. In case you have made a mistake in data entry, click on “EDIT” to correct the same.
  21. On confirmation, nine digit alpha numeric Acknowledgment number would be generated.

What is the periodicity of Filing the Form 26QB?

The deductor i.e the buyer of property has to file form 26QB which is a Challan cum declaration statement within 30 days from the end of the month in which payment is made.

What are the penalties of delay?

Non-compliance with the TDS provisions or failing to file TDS return on time or not deducting the right amount of tax can land you in trouble.

  • Implication of Non-deduction: Interest @ 1 % p.m. of such tax from the date on which such tax was deductible till the date on which such tax is deducted.
  • Implication of Non-payment: Interest @ 1.5% p.m. of such tax from the date on which such tax was deducted till the date on which such tax is actually paid.
  • Fees for Late Filing of TDS Return: Under section 234E, a fee of ₹ 200 per day would be levied for late furnishing of TDS statement from the due date of furnishing of TDS statement to the date of furnishing of TDS statement, maximum up to amount of tax deductible.
  • Penalty for failure to furnish TDS Return: Assessing officer may direct a person who fails to file the statement of TDS within due date to pay penalty minimum of Rs.10,000 which may be extended to Rs.1,00,000.
  • Besides penalty and interest, defaulters can also face imprisonment for a term which shall not be less than 3 months but may extend to 7 years along with fine.
  • For delay in issuing Form 16B, the penalty is Rs 100 per day.

What is Form 16B and where will I get the form?

Form 16B is the TDS certificate to be issued by the deductor (Buyer of property) to the deductee (Seller of property) in respect of the taxes deducted and deposited into the Government Account. Form 16B will be available for download from the website of Centralized Processing Cell of TDS (CPC-TDS) www.tdscpc.gov.in

How to download Form 16B?

  1. Register & login on TRACES portal ( www.tdscpc.gov.in ) as taxpayer using your PAN.
  2. Select “Form 16B (For Buyer)” under “Downloads” menu.
  3. Enter the details pertaining to the property transaction for which Form 16B is to be requested. Enter the Assessment Year, Acknowledgment Number, PAN of Seller and click on “Proceed”.
  4. A confirmation screen will appear. Click on “Submit Request” to proceed.
  5. A success message on submission of download request will appear. Please note the request number to search for the download request.
  6. Click on “Requested Downloads” to download the requested files.
  7. Search for the request with request number. Select the request row and click on “HTTP download” button.
  8. To open the file, the password is Date of Birth of the BUYER (in DDMMYYYY format)

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