From June 1st, 2013, when a buyer buys immovable property (not agricultural land) that costs more than Rs. 50lakhs, then the buyer will deduct the TDS while making payment to the seller under section Income Tax Act. For paying TDS, the seller will obtain Form 16B and Form 26QB for the buyer.
- The buyer will deduct TDS at 1% of the total sale consideration.
- If sale consideration is less than Rs. 50lakhs then No TDS is deducted.
- If payment is made in installments then TDS is also deducted on each installment.
- Tax is paid on the entire sale amount. This is applicable even there is more than 1 buyer or seller.
- TDS is deducted at the time of payment or at the time of giving credit to the seller, whichever is earlier.
- PAN card is mandatory for the seller not for the buyer.
- If the seller does not provide the PAN card then 20% TDS is deducted.
- Deposit Form 26QB and the amount of TDS deducted within 7 days.
- After depositing TDS to the government, the buyer has to furnish the TDS certificate to seller. TDS Certificate is available within 10-15 days after depositing the TDS.
- For paying TDS
- Seller is required to obtain Form 16B
- Buyer is required to obtain Form 26QB
Steps to pay TDS
Step 1: Make Payment through Challan 26QB (Online and Offline)
- Choose the Form 26QB from the Income Tax Department website
- Select 0020: corporate payer and 0021: non-corporate payer and fill the necessary details.
- There are 2 modes of payment
- Online mode: through net banking
- Offline mode: by visiting any of the Bank branches.
Choose any of the options for the payment and Proceed.
If online mode (net-banking) is chosen for the payment, the bank provides the Challan 280.
If offline mode (by visiting the bank) is chosen, an online receipt for Form 26QB with a unique Acknowledgment Number is generated. This is valid for 10 days (after generation).The authorized bank will proceed with the online payment and generate the challan.
Step 2: Generation of Form 16B or Form 26QB
- For the first-time users, register yourself on TRACES (govt. Website) as a Tax Payerwith PAN and the Challan number registered during payment.
- After the registration on TRACES, a seller/buyer is able to get the Form 16B or Form 26QB.
- Check Form 26ASafter 7days of the payment. The payment will be reflected in Part F under ‘Details of Tax Deducted at Source on Sale of Immoveable Property u/s 194(IA) [For Buyer of Property]’.
This shows a detail of TDS certificate number (that TRACES generates), name and PAN of the deductee, transaction amount and date, acknowledgment number (same as on Form 26QB), and TDS deposited.
Step 3: Download Form 26QB or Form 16B
- Login to TRACES after payment is reflected in Form 26AS.
- Request for Form 26QB and 16B by clicking on the concerned links.
- Enter the 9-digit acknowledgment number and details in Part F of Form 26AS.
- By filling the details, this will generate an application request number and an application is received.
- The request will be processed after few hours. Click on downloads tab and then on Requested downloads (as shown in image).
- You can check the status of Form 16B or Form 26QB from download request. If the status says Submitted, then wait for few hours.
- Download the .zip file by entering the password i.e. the Date of Birth (D.O.B) of the Deductor (format is DD-MM-YYYY). The form is available inside the .zip file as a pdf.
TDS is not deducted for the agricultural land but under some conditions, it is deducted.A land is not treated as an agricultural land if:
- Land is situated within jurisdiction of Municipality (or Cantonment Board) that has a population not less than 10,000 or
- The land is situated in any area within the distance mentioned below:
In case you are confused about TDS Return Filing as a deductor, feel free to consult the experts at LegalRaasta. You can get comprehensive assistance with our TDS Return Filing Software which supports TDS on Salary payments (Form 24Q), Rent, Interest, Commission and other Non-salary transactions (Form 26Q), NRI (Form 27Q)and TCS (Form 27EQ).