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]

1. When your are liable to deduct TDS on 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.

2. When to deposit the TDS to Government after deduction?

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)]

3. How to make payment of TDS to Government?

Following steps are involved while making the payment of TDS :-

  • First go to the website tin-nsdl.com.
  • Click on the tab Services and then click e-payment : Pay taxes Online.
  • After that a new window will be open, that contains different challans for payment of TDS under different sections.
  • Click on proceed on TDS on Property (Form 26QB) tab (in third row first column).

4. Details required for filing the Form 26QB

filing the Form 26QB

In the First Tab (Taxpayer Info) following details are required to be filled:

  • Tax Applicable
    • (0020) Corporation Tax (Companies)
    • (0021) Income Tax (Other than Companies)

Select code 0020 if you are a company (person deducting TDS), otherwise select 0021 for persons other than company.

  • Financial Year– It will be auto populated on the basis of Date of Payment / Credit filled in the form.
  • Assessment Year– It will be auto populated on the basis of Date of Payment / Credit filled in the form.
  • Type of Payment– It is auto selected as (800) TDS on Sale of Property.
  • Status of Payee / Seller / Transferor– Select Resident or Non-Resident .
  • Permanent Account No. (PAN) of Transferee (Payer/Buyer)– Enter the PAN of Buyer which is compulsory required to fill the form. After filling the PAN, it will automatically confirm the category of PAN of Transferee whether it is company, individual etc.
  • Permanent Account No. (PAN) of Transferor (Payee/Seller)– Enter the PAN of Seller which is required so that it is reflected in Form 26AS of Seller and he/she can claim TDS on sale of property while filing Return of Income.

filing Return of Income

In the Second Tab (Address) following details are required to be filled:

  • Complete Address of the Transferee (Buyer)– It also require whether there are more than one transferee / buyer.
  • Complete Address of the Transferor (Seller)– It also require whether there are more than one transferor / seller.

filing Return of Income images

In the Third Tab (Property Details) following details are required to be filled:

  • Complete Address of the Property Transferred– It includes details like type of property whether it is land or building, Date of Agreement / booking, Total Value of Consideration, Payment Type (Lump sum or Installment).
  • Amount paid / credited– Enter amount in figures and words.
  • Tax Deposit Details– Provide details like Total Amount paid / credited, Basic Tax , Interest , Fee (if any).

Tax Deposit Details

In the Fourth Tab (Payment Info) following details are required to be filled:

  • Mode of Payment– Select e-payment immediately or on subsequent date.
  • Date of Payment / Credit
  • Date of Tax Deduction
  • Captcha Code

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.

5. Request for Form 16B [TDS Certificate for Sale of Property]

  • Request can be made at tdscpc.gov.in after creating New ID as Tax payer.
  • Generally after payment of challan, it takes 4-5 working days for processing of challans, only after that you can request for Form 16B.
  • Form 16B is itself an evidence that TDS deducted on payment to seller has been deposited to government.

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35 Comments

  1. Sanjay says:

    Two Partners purchased plot in August’20 & paid advance to seller from their personal accounts. In Sep’20 have got LLP registered. Now they want to take back the advance paid to seller from LLP in Sep’20. What is the implication of TDS?

  2. amar says:

    Hi today when I was paying tds online on property which I purchased. The tax rate was shown as 0.75%. There was no option for change to 1 %. Is there any change in rules ??

    Regards…. Amar

  3. Rajeev Kumar Agrawal says:

    Sir
    I want to purchase a flat in pune which is jointly owner by muslim lady along with her late husband.
    There are 4 legal heirs Wife, 2 NRI sons, one resident daughter. To save the hardship of 20% TDS, they are of opinion to exceute sale deed by all legal heirs but want to release the payment in name of his/her mother who is local resident. Can it possible to issue the 12 B in name of mother whereas in facts sale deed is going to execute by 4 persons. Is there any violation of law.

  4. virender singh Chaudhry says:

    IF THE SELLER ARE JOINT HOLDER OF PROPERTY ( COUPLE SAY) WITH EQUAL SHARE) AND on sale IF SELLING PRICE is RECEIVED by two cheques i.e Rs 2750000 to husband and Rs 2750000 to the spouse. then in this case will 1% tds be deducted by the buyer before making final payment. There is no capital gain a per indexation.please clarify

    1. Navneet says:

      Yes, TDS will be deducted @ 1% on payments made. For Capital gains, you have to check the provisions and eligibility criteria mentioned under sec 54, 54EC etc.

  5. Ritesh says:

    I have purchased property worth 90 lakhs and made payments in three installments in the month of August 2020. Can i deposit TDS on the entire 90 lakhs in one go before 30 September 2020?

    1. Navneet says:

      You have to pay TDS at the time of payment in 3 instalments. If you pay now the entire TDS, then you have to pay interest as well for late payment of TDS @ 1.5% pm.

  6. praveen says:

    Who is responsible to deduct and pay the TDS on sale /purchase of property worth more than 50 Lacs?
    In case the party responsible to deduct and deposit the TDS fails to comply, can or will the other party be held liable? If yes what kind of penalty can be levied?
    Thank you.

  7. Ankur Sharma says:

    Hi,

    My date of agreement for property purchase is 1st November 2019. This was registered at full value basis 20% advance payment.

    I then made another 20% payment as per payment structure agreed with the builder. TDS was deposited on time for this 40% (20+20) payment.

    The balance 60% of the agreement value was to be paid after receipt of OC. The OC has been received now. This 60% payment will be done by the bank as a home loan.

    But the bank wants me (buyer) to pay the TDS first, only then it will disburse the loan amount to the builder.

    1. My question is how do i pay TDS in advance?

    2. What date do i fill in form 26QB for the question DATE OF PAYMENT/CREDIT/DATE OF PAYMENT TO THE TRANSFEROR/SELLER? I am confused, as this date will depend on when the bank disburses this balance amount, but wants me to pay TDS first.

    Kindly guide.

    1. Navneet says:

      Firstly you should ask the date of payment to bank and explain your problem to them about advance payment of TDS. Practically not possible to enter Date of Deduction of TDS without Date of payment.

  8. Shafi says:

    Is TDS applicable for buying a property which is already in Home Loan? Planning to take home loan of 55 lanks to buy a property. If i want to pay TDS after Registration date within how many days i should pay TDS? If the Registration value is 69 lakhs what will be my TDS?

    1. Navneet says:

      TDS should be deducted on Rs 69 Lakhs at the rate of 0.75% if property purchased between 14.05.2020 and 31.03.2021, otherwise rate would be 1%. TDS should be deducted at the time of payment and deposited within 30 days of deduction.

  9. In case of endorsement of flat from 1st buyer to 2nd buyer the agreement to sell in amount 10000 while agreement to sell b/w 1st buyer and builder was at 15000. TDS 2nd buyer should deduct at which rate.

    15000 is approx circle rate and on which registery will be done bw 2nd buyer and builder.

    Kindly guide.

  10. Jawahar Lal Mehta says:

    TDS deducted 1% on purchase of property and same is deposited but wrongly deposited u/s 194J instead of 194IA. kindly suggest me what should I do in wrongly u/s 194J

  11. vikram singh says:

    i have bought a plot exceeding to Rs. 50 lakhs. HUDA office made re-allotment order in my name . whether TDS is required to be deducted.

    1. Navneet says:

      Yes, TDS is required to be deducted if value exceeds Rs. 50 lakhs and bought any immovable property other than agriculture land.

  12. Praveen says:

    Buyer wrongly deducted TDS as 1% and deposited the same to Tax authority but Income tax authority shown as 0.75 %credited in 26AS of seller.
    What happened to the amount of 0.25% which were already deposited to the authority

    1. Navneet says:

      That was not possible as per my knowledge because when you deposit TDS by filing Form 26QB it will automatically calculate TDS on the value mentioned and if it is showing 0.75% in Form 26AS then buyer has deposited only that much amount and you should reconfirm from buyer.

      1. John says:

        I too have deposited 1% TDS, however 26QB shows only 0.75% as deposited, how to get the balance difference. Even in the correction request, it does not show the amount of tax paid

  13. Kumar says:

    I have paid a small amount during the sale agreement without deducting the TDS and couple of months later, planning to pay the remaining in one payment by deducting TDS (of sale amount) during registration of the property. Is it ok to pay the TDS once to Govt after the sale deed done? Will I be charged late fee for the agreement amount that I paid without deducting TDS?

    1. Navneet says:

      TDS has to be deducted at the time of payment. If you are paying whole TDS at the time of making balance payment, then you have to pay interest on late deduction of TDS which is to be deducted at the time of first payment.

  14. maddy says:

    Dear sir, if agreement is made on 22 june 2020 and property is second hand. loan from bank is still under process , loan amt will get deposit to buyer account and then buyer will pay the same to seller. is 30 days calculation is from date of agreement or date of payment on which buyer will pay the amount to seller. if buyer pay amt to seller after three month. then what is date of tds deposite .pls suggest asap. thanks in advance

    1. Navneet says:

      TDS is to be deposited within 30 days from the end of the month in which deduction is made. For example if you are paying in installments the payment to seller, then on every installment you have to deduct TDS. Date of payment is relevant as date of payment and date of deduction should not differ as if differ it leads to interest on late deduction.

  15. Kapil says:

    1. Is this TDS Rate changed from 1% to 0.75 % if payment date is on or after 14th May 2020?
    2. I have taken a loan and my registry date is 1st July 2020 , can I pay the TDS On any date before 1st July ? If yes, what will be the date of payment to transferor/seller and what will be the date of TDS deduction date ?
    Any help will be highly appreciated!!
    Thanks!!

    1. Navneet says:

      1. Yes, TDS rates are reduced for the period 14-05-2020 to 31-03-2021 to 0.75%.
      2. Practically TDS should be deposited after payment to the transferor after deducting TDS within the time frame mentioned in rule 30(2A) as mentioned above and as per sec 194-IA , TDS should be deducted at the time of payment or at the time of credit of such sum to transferor whichever is earlier. So, when the amount is paid by way of loan to the transferor, you should take date of credit to account of transferor as deduction date and TDS should be deposited within 30 days of deduction.

  16. sanjay korde says:

    TDS APPLICABILITY OF INDUSTRIAL PLOT & BUILDING MIDC PROPERTY PURCHASED IN AUCTION FROM DRT COURT PAYMENT MADE TO ARCIL .FULL AMOUNT RECEIVED BY ARCIL AMOUNT IS ABOVE 50 LAKHS. TDS NOT DEDUCTED FULL AMOUNT PAID IN BID.

    1. Navneet says:

      TDS will be deducted as per the provisions of Income tax act until and unless other acts provision overrides the provisions of income tax act.

  17. Keshav says:

    The writeup doesnot mention about TDS applicable to NRI sellers.It is 20%+surcharge on total sale.TAN is required to remit this.No article I have read highlights this .Please include a paragraph on this most important aspect.

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