HOW TO PAY TDS ON SALE OF PROPERTY

As per Finance Bill of 2013, TDS is applicable on sale of immoveable property wherein the sale consideration of the property exceeds or is equal to ₹ 50,00,000 (Rupees Fifty Lakhs). Sec 194IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration.

TDS is to be deducted on all properties whether residential, commercial, industrial property or flat, building or vacant plot except agricultural land.

How to deposit TDS deducted ?

Buyer is not required to take TAN number. Can simply fill the form 26QB available in income tax portal and deposit with government TDS deducted from seller. 

TDS deducted at time of making payment must be deposited within 30 days from the end of the month in which deduction is made. Buyer is required to furnish TDS certificate in form 16B to seller which is available around 10 to 15 days after depositing TDS.

Steps to fill form 26QB

1. Go to e-pay tax in income tax portal​
2. Under 'TDS on sale of property', click on "Online form for furnishing TDS on property (Form 26QB)"
3. Select the applicable challan as "TDS on Sale of Property".
4. Fill the complete form as applicable.

(User should be ready with the following information while filling the form 26QB)

1. 1. PAN of the seller & buyer
   2. Communication details of seller & buyer
   3. Property details
   4. Amount paid/credited & tax deposit details
   5. Submit the duly filled form to proceed. ​A confirmation screen appears. After confirming, a screen appears showing two buttons as "Print Form 26QB" and "Submit to the bank". A unique acknowledgement number is also displayed on the screen. It is advisable to save this acknowledgment number for future use.
   6. 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.
   7. 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.

Proceed to TRACES portal (www.tdscpc.gov.in) after 5 days to download Form 16B.

Steps 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. ​​​​​

For more details, Please watch our video

If you want to learn How to download Form 16B, click this video