Filing of TDS on purchase immovable property made easy

The Central Board of Direct Taxes (CBDT) has notified the new provision under section 194IA, wherein after 01.06.2013 1% Tax Deducted at Source(TDS) has to be levied on sale/transfer of  immovable property (other than rural agricultural land) exceeding  Rs 50 lakhs. Buyer of the property is required to deduct the 1% TDS before making the payment to the seller.  

Since this tax is new and not everyone is well versed with the concept. There is confusion amongst the property buyers and sellers, we have tried to answer most of the queries in the simplest of the way.

Who will deposit this tax?

This tax has to be deposited by the buyer on behalf of the seller and after the registration/transfer/allotment buyer gives seller certificate 16B (16B is certificate given by buyer certifying that the 1% TDS has been deposited in government treasury on sellers behalf).

What if property is bought on lump sum or in  installments?

If property is bought on lump sum basis then 1% of the total sale consideration has to be deposited as TDS.

If the property is bought on installments or bought in construction link plan then 1% TDS has to deducted and deposited if the cumulative value of the property is more than Rs 50 lakhs. Buyer has to deposit 1% as TDS in each installment.

How to deposit?         

This is the question that troubles most of the buyers, but it is very easy and can be done at ease. It will just few minutes if buyer has net banking facility and for those who don't have net banking then process becomes bit lengthy but remains easy.

For those who have net banking.

• Those buyers with net banking can open  Form 26QB (Form to file TDS on property).
• Before filling the form buyer must have Pancard Number of both buyer and seller.
• Buyer must have the correct address of the property purchased and  complete residential addresses of buyer and seller.
• Click Here and select Form 26QB and start filling up the requisite information.
• Once you fill the form it will ask you to confirm the details (this is important).
•  After confirmation 9 digit acknowledgment number will be allocated to you.
•  Then you will be asked to proceed for payment.
•  Select your bank and make payment

·       Once your payment is done you will receive Challan Identification number (CIN). This CIN is the proof that buyer has made the payment of TDS on behalf of seller. This CIN Number is required to mentioned in registry/transfer documents.

For those who don't have net banking facility.

If the buyer does not have net banking facility then it is advised to get net banking facility activated, it takes a week's time to get this service activated. In case net banking con not be activated then follow these steps.

• Click Here and select Form 26QB and start filling up the requisite information.
• Once you fill the form it will ask you to confirm the details (this is important).
• After confirmation 9 digit acknowledgment number will be allocated to you.
•  Take 3 prints of acknowledgment.
• Contact the bank (Click here to see Income Tax approvedbanks). 
• Please note not all banks accept TDS/Challan. Enquire about  such branch.
• Deposit money in cash or cheque in  selected bank. 
• Bank must deposit TDS by its net banking account.

·         Once your payment is done you will receive Challan Identification number (CIN). This CIN is the proof that buyer has made the payment of TDS on behalf of seller. This CIN Number is required to mentioned in registry/transfer documents.

What after the Challan Identification number (CIN) is issued?

Once the CIN is issued then buyer can proceed with final transaction i.e. transfer or registration. After this buyer is required to sign and give 16B certificate (Certificate of TDS deduction) to seller for his Income Tax return and related purposes.

Form 16B will be available for download from the website of Centralized Processing Cell of TDS (CPC-TDS) www.tdscpc.gov.in

We have tried to simplify the filing of TDS on sale & purchase of immovable property worth more than Rs 50 Lakhs

For more FAQs and their answers  Click here

For tutorials on how to file TDS on net Click here

The author of this article can be reached at 9899740003 or pankaj@easyghar.com for further clarification. 

Author manages a leading real estate portal www.easyghar.com