Article explains Provisions of Section 194I related to TDS on Sale of Property with value exceeding or equal to Rs. 50 Lakhs. It explains When your are liable to deduct TDS on Sale of Property, When to deposit the TDS to Government after deduction, How to make payment of TDS to Government, Details required for filing the Form 26QB and how to Request for Form 16B [TDS Certificate for Sale of Property]
As per provisions contain in sec 194-IA of Income Tax Act, if any buyer responsible for paying to a resident seller any amount exceeding or equal to Rs. 50 Lakhs for sale of immovable property other than agricultural land, then the buyer is required to deduct TDS @ 1% of consideration for transfer of immovable property.
As per Finance Act 2019, Consideration for transfer of immovable property shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property.
Even when the amount is paid in installments, then even you are liable to deduct TDS @ 1% on the amount paid if the total amount paid is equal to or exceeds Rs. 50 Lakhs.
TDS is required to deduct irrespective of type of property whether it is land or building or vacant plot, residential or commercial or industrial property.
If GST is levied on transaction value for purchase of property, then TDS would be deducted on the amount excluding GST amount.
After deduction of TDS on the amount, it is to be deposited to Central Government within a period of 30 days from the end of the month in which deduction is made and it should be accompanied by a statement in Form 26QB. [Rule 30(2A)]
Also Form 26QB is to be filed within a period of 30 days from the end of the month in which deduction is made. [Rule 31A(4A)]
Following steps are involved while making the payment of TDS :-
In the First Tab (Taxpayer Info) following details are required to be filled:
Select code 0020 if you are a company (person deducting TDS), otherwise select 0021 for persons other than company.
In the Second Tab (Address) following details are required to be filled:
In the Third Tab (Property Details) following details are required to be filled:
In the Fourth Tab (Payment Info) following details are required to be filled:
Date of Payment / Credit and Date of Tax Deduction is required to calculate the interest, fee if any which is required to be paid in case of late payment.
After payment of taxes, Challan is generated which is the proof of payment of TDS.