TDS on Property Sale

Important points to note:

1. As per Finance Bill of 2013, TDS is applicable on sale of immoveable property wherein the sale consideration of the property exceeds or is equal to ₹ 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% or 0.75% should be deducted (depending upon the Date of Payment/Credit to the Seller) by the purchaser of the property at the time of making payment of sale consideration.
   
   
2. The Sale deed should reflect the amount paid to the seller as well as the amount deducted and paid as TDS against the sale.
   
   For example, if official total value of sale of property to be mentioned on the Sale Deed is Rs 1 crore, then 99 Lakhs are to be paid to the seller and 1 Lakh ( 1% ) is to be deposited as TDS, and this too should be mentioned on the sale deed.
   
   
3. Tax so deducted should be deposited to the Government Account through any of the authorised bank branches within a 30-40 day time period from the date of registration of the property.
   
   
4. Collect the correct Permanent Account Number (PAN) of the Seller and verify the same with the Original PAN card.
   
   
5. PAN of Seller as well as Purchaser should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction.
   
   
6. Do not commit any error in quoting the PAN or other details in the online Form as there is no online mechanism for rectification of errors. For the purpose of rectification you are required to contact Income Tax Department, which can take a long time.
   
   

Step A : Fill Form 26QB and Pay TDS

1. Go to TIN Protean (formerly NSDL eGov) website​ ( https://www.protean-tinpan.com/ ).​
   
   
2. Under Services, go to ‘TDS on sale of property’, and under that click on “Online form for furnishing TDS on property (Form 26QB)”.
   
   
3. Select the applicable challan as “TDS on Sale of Property (Form 26QB)”.
   
   
4. Fill the complete form as applicable.(User should be ready with the following information while filling the form 26QB :
   
   1. PAN of the seller & buyer
   2. Communication details of seller & buyer
   3. Property details
   4. Amount paid/credited & tax deposit details
      
      
5. Submit the duly filled form to proceed. ​A confirmation screen appears. After confirming, a screen appears showing two buttons as “Print Form 26QB” and “Submit to the bank”. A unique acknowledgement number is also displayed on the screen. It is advisable to save this acknowledgment number for future use.​​ Click on “Print Form 26QB” to print the form (you can save/print it as a PDF also to print later).
   
   
6. Then click on “Submit to the bank” to make the required payment online through internet banking. Then proceed to the payment page through internet banking facility of various banks. The authorized banks include Axis Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Dena Bank, HDFC Bank, ICICI Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab and Sind Bank, Punjab National Bank, State Bank of India, UCO Bank, Union Bank of India, Vijaya Bank.
   
   
7. On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment​ being made. Please print/save this.

Step B: Download Form 16B

1. Form 16B will be available for download after 5 days from the date of generation and successful payment on Form 26QB. It will be available on the TRACES portal.
   
   
2. Register & login on TRACES portal (www.tdscpc.gov.in) as taxpayer using your PAN.
   
   
3. Select “Form 16B (For Buyer)” under “Downloads” menu.
   
   
4. Enter the details pertaining to the property transaction for which Form 16B is to be requested. Enter the Assessment Year, Acknowledgment Number, PAN of Seller and click on “Proceed”.
   
   
5. A confirmation screen will appear. Click on “Submit Request” to proceed.
   
   
6. A success message on submission of download request will appear. Please note the request number to search for the download request.
   
   
7. Click on “Requested Downloads” to download the requested files.
   
   
8. Search for the request with request number. Select the request row and click on “HTTP download” button. ​​​​​
   
   
9. Download the same and keep the copies safely. The same can be used during the annual filing of IT returns.
   
   

Penalties applicable for non-payment or late payment of TDS

Interest on:	Calculation
Non-deduction of TDS	1% per month for the period from the date on which TDS is deductible/collectable to the date on which TDS/TCS is actually deducted.
Non-remittance of TDS	1.5% per month for the period from the date on which TDS is deducted to the actual date of payment.
Late filing fee under section 234E @ Rs 200 per day	In case of default of non-filing or late filing of Form 26QB, a penal fee is applicable under section 234E of the income tax act. Rs. 200 has to be paid for every day during which such failure continues. The buyer would also be liable for defaults of late Deduction, late payment and interest thereon.
Penalty under section 271H	Assessing Officer may levy penalty under section 271H at his discretion. This section is applicable when a statement as required by the tax laws is not submitted timely. Penalty under this section must be more than Rs 10,000 and can extend to Rs 1lakh. However, if TDS is deposited with fee & interest and statement is submitted within 1 year of the time prescribed, no penalty shall be levied.