TDS

A Guide To TDS Payment Of Property Sale

A complete guide on how to make TDS payment on Property sale. In brief, mention the due date, the portal through which the payment can be made, and then the points to be remembered by the property buyers and owners. After this, the steps for filing 26QB Form. And finally, the steps for downloading form 16B.

A Guide To TDS Payment Of Property Sale: Introduction

Tax Deduction at Source (TDS) is one of the most commonly used economic terminologies. Whether you are an employee or you own a business, these deductions have emerged to become an integral part of your transactions. However, the concept of TDS is unclear for most individuals, especially those belonging to non-finance backgrounds. As a result, people wonder why there is hard-earned money being deducted even before they receive the amount in totality during property sales.

Here is some highly crucial information concerning TDS payment of property sales. It will help you understand the intricacies and significance of the process, enabling you to better cooperate with the legalities.

A Guide To TDS Payment Of Property Sale: Tax Deducted at Source (TDS)

The concept of TDS in the tax system was introduced to collect tax from the very source of income. Under TDS, a person (deductor) who is liable to make payment of specified nature to another individual (deductee) shall deduct tax at source and remit the same into the Central Government’s account. The deductee would be entitled to get the credit of the amount so that the deductor issues a deduction based on Form 26AS for the TDS certificate. 

Section 194 of the Income Tax Act deals with the requirement of TDS deduction by the buyer during the time of purchase of the property. TDS has been deducted at the rates prescribed by the tax department. 

Due Date To Pay TDS

TDS must be paid on the transfer of immovable property within 30 days from the end of the month from which the deduction is made.

A Guide To TDS Payment Of Property Sale:  Online TDS Payment

Online TDS payments can be made through the portal authorised by the tax department. It is a hassle-free and instant way to make the online payment of TDS. However, make sure that you fill in the details correctly.

Points to Be Remembered by the Owner and Buyer

Following are some of the significant points to be considered by the owner and buyer concerning TDS payment of property sales.

  • The buyer must deduct the tax to pay the government on property purchases above INR 50 lakhs.
  • The power and responsibility of deducting the TDS are with the buyer, but not the seller. 
  • If the buyer does not discharge this duty, they can be penalised by the tax authorities.
  • The buyers are responsible for filling out form no.26QB to credit the TDS.

Steps For Filing 26 Qb

In TDS 26QB is a return-cum-challenge form for the payment of TDS. As per Income Tax Act, any company or person making a payment is required to deduct tax at source if payment exceeds a certain threshold limit. 

  • Visit the site: https://www.tin-nsdl.com/.
  • Click on the Services option e-payment: Pay Tax Online.
  • Click on the “Proceed” option under ‘TDS on Property (Form 26QB)’.
  • Fill out the form by providing the relevant details asked. Make sure you possess the following details before filling out the form.
    • PAN details of both buyer and seller. 
    • The Property details. 
    • Communication details of both buyer and seller. 
    • Tax deposit details. 
    • The amount that has been credited/paid in the transaction.

After completing the above procedure,

  • Select the “Submit” button in the form. 
  • A confirmation screen will be displayed. After confirmation, the two options that will appear on the screen, The ‘Print Form 26QB’ and the ‘Submit to the bank’. A unique acknowledgement number will also be displayed. Make sure you note the number. 
  • Next, click on the option ‘Print Form 26QB’.
  • Next, click on the ‘Submit to the bank’ button. 
  • Next, you should make the payment through internet banking. Then you will be redirected to the payment page of the bank you choose to make the payment. 
  • After the payment has been made, a challan is displayed with the bank name, payment details, and CIN. The challan will be considered as proof of the payment made. 

After making payment proceed to the TRACES portal( www.tdscpc.gov.in) after five days to download Form 16B

Steps To Download Form 16B

Form 16B is an indicator of the amount of money that has been paid as property Tax Deducted at Source (TDS).

  • First, register & login on to the TRACES portal ( www.tdscpc.gov.in) as a taxpayer using your PAN. 
  • Select the option “Form 16B (For the buyer)” under the “Downloads” menu. 
  • Enter the details required for the property transaction for which Form 16B has to be requested. They are the Assessment Year, Acknowledgment Number, PAN of Seller, and then click on “Proceed”. 
  • A confirmation screen will appear. Click on “Submit Request” to proceed. 
  • A success message on the submission of the download request will appear. Do note the request number to search for the download request. 
  • Next, click on the “Requested Downloads” option to download the requested files. 
  • The last step, search for the request with the request number. Select the request option and click on the “HTTP download” button. ​​​​​

Being aware of tax procedures and paying them on time is one of the top prioritised duties of every citizen. TDS online portal helps one pay tax with a single click at their doorsteps. 

Additional And Basic Information You May Want To Know 

A layperson is often found to be perplexed with the basic information and details regarding TFS payment of property sales. Here are a few questions that you would like to know the answers to.

  • Who pays TDS tax?

The buyer pays TDS tax when the payment crosses the prescribed limit made while purchasing the property.

  • Can TDS be paid online?

Yes, It can be paid online in a government authorised portal

  • What is the due date to pay TDS?

TDS must be paid on the transfer of immovable property within 30 days from the end of the month the deduction is made.

  • What are the consequences of not paying TDS on time?

A person or entity is penalised under section 234E of the Income Tax Act for not paying TDS on time.

Closing

We at VakilSearch are a tech-savvy team of professionals who strive to assist small and well-established entrepreneurs in understanding their legal obligations to the kind of business they are operating. Visit our website to learn more about us and keep legal complications at bay.

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