Things to Know About TDS on the Sale of Property

As per the Section 194-IA of the Income Tax Act, if you have bought an immovable property such as a house, flat, commercial building, etc. (save for agriculture land) for more than Rs. 50 lakhs, then you are required to deduct TDS on the same.

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The following are some of the key points to remember regarding TDS applicability on the sale of property:

• You, as a buyer, have to deduct a 1% TDS on the total price of the property. Remember- it’s you who have to deduct the TDS and not the seller.
• If you have bought a property through an EMI scheme, then you have to deduct the TDS for every installment
• TDS has to be paid on the full price of the property and not the amount exceeding Rs. 50 lakhs. So, if you have bought a house for Rs. 56 lakhs, then you have to pay TDS on the full Rs. 56 lakhs and not Rs. 6 lakhs, which is the difference of the actual amount and the threshold amount (Rs. 56 lakhs and Rs. 50 lakhs respectively).
• Buyers are not required to obtain a Tax Deduction Account Number. Sellers, on the other hand, have to furnish their PAN. If they are not able to provide the same, then the actual TDS has to be 20%.
• TDS amount has to be deposited within 7 days from the end of the month in which it was deducted.
• Once you have deposited the TDS you can obtain a TDS certificate after about 2 weeks. The same has to be furnished to the seller as a confirmation.

If you have recently bought a property then you can pay the applicable TDS using the Challan 26QB easily online or even offline at any of the authorized banks. You can download the form here.