If you are buying a property whose value is more than Rs.50 lakh, then the buyer has to deduct TDS on the property and can pay TDS on sale of property online. Let us see how you can pay it online.
According to Section 194IA, if you are buying an immovable property (other than agricultural land) and value is equal to more than Rs.50 lakh, then the buyer must deduct the TDS and pay it to Government. In this post, we concentrate on how we can pay TDS on sale of property online option.
As I said above, agricultural land will not be considered for deduction of TDS under Section 194IA. Hence, first, let us understand the meaning of agricultural land as per IT act.
Any area which is outside the jurisdiction of municipality or cantonment board having a population of 10,000 or more and also which does not fall within the distance (to be measured aerially) given below-
# If the population of municipality/cantonment board is more than 10,000 but less than 1 lakh-2 Kms from local limits of municipality/cantonment board.
# If the population of municipality/cantonment board is more than 1 lakh but less than 10 lakh-6 kilometers from the local limits of municipality/cantonment board.
# If the population of municipality/cantonment board is more than 10 lakh-8 kilometers from the local limits of municipality/cantonment board.
Before proceeding further, let us understand the conditions and features of Section 194IA.
# Buyer- Name , PAN number and Complete Address of the buyer. Buyer is called Transferee. If there are multiple buyers then details of all such buyers.
# Seller- Name , PAN number and Complete Address of the seller. Seller is called Transferor. If there are multiple sellers then details of all such sellers.
# Property– Address of the property.
# Transaction details- Date of Agreement, Total Value of Consideration,Payment Type (In Lump Sum or installment) or payment mode.
What is the buyer is NRI and seller is residentSS? Indian? Whether the TDS need to be still deducted by NRI buyer? The answer is yes. Because in this case seller is resident Indian. TDS on property applies to resident Indian seller not to the buyer. Hence, the buyer has to deduct TDS.
If the seller is an NRI, then Section 194IA will not be applicable. In such cases, Sec. 195 will come into the picture. Buyer has to deduct 20.66% TDS on the sale price of the property if the capital gain is long-term. In the case of short-term capital gain, TDS will be 33.99% irrespective of income tax slab of NRI. Buyer will deposit TDS with Income Tax Department. TDS is applicable even if the value of the property is less than Rs.50 lakhs.
Here, I will explain you about how you can pay TDS on sale of property online. However, you can pay the TDS offline by visiting the authorized banks. The list of authorized banks is available at NSDL Website.
Below are the steps to pay TDS on sale of property online.
# Visit NSDL Home Page.
# Then Click on the option “TDS on sale of property’ and under TDS on sale of property, Click on the option ‘Online form for furnishing TDS on property’.
# Select Form for Payment of TDS on sale of Property and click on the option “TDS on sale of property”.
# Fill the details as shown below.
# Next step is to provide complete details of buyer and seller. Also, provide the property details. The screen looks like below.
# Next is to submit the total amount buyer paying to the seller and also the TDS amount deducted on that.
# Next step is to chose the payment option, bank, date of the payment and click on proceed.
# Once you click on the tab of proceed, you will be redirected to the confirmation page where all details you entered already will be displayed once again. Verify the details for any correction. Then click on the tab of CONFIRM.
# On confirmation a 9 digit unique acknowledgement number will be generated. This you have to save for future usage.
# Next click on tab called “Submit to Bank”. On clicking on Submit to the Bank, deductor will have to login to the internet banking site with the user ID/ password provided by the bank for internet banking purpose. Then enter bank details at bank site. Once the payment is successful, then 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.
Form 26QB is a challan used if the sale consideration of the property exceeds or is equal to Rs 50 lakh, then TDS at 1% should be deducted by the buyer of the property at the time of making payment of sale consideration.
Form 16B is the TDS certificate to be issued by the buyer to the seller as a proof of the taxes deducted on the sale of immovable property and deposited into the Government Account.
Once you do the payment procedure as above, then the next step is to take the proof of TDS for buyer and seller. For the buyer it is Form26QB and for the seller, it is Form 16B. You can download Form 16B after two days of paying the TDS.
You have to login to Traces site. In this Traces portal, go to the “Download” tab click on “Application for Request of Form 16B”. For the Form 26QB, click on Application for Request of Form 26QB. For finishing this process, fill the 9-digit acknowledgment number and the details in Part F of Form 26AS. This will generate an application request number and give you an application. After a few hours, the request will be processed. Click on the “Downloads” tab and select “Requested Downloads” from the drop-down menu.
As I said above, it is the responsibility of the buyer to deduct TDS and deposit with IT Department. Hence, if there is a failure to do so, then there are two types of penalties.
1) If the buyer failed deduct TDS-Penalty of 1% per month (or part thereof) from the date on which tax was deductible to the tax is actually deducted.
Let us take an example for the same. Mr.X purchased a property worth Rs.60 lakh on 20th August, 2016. He failed to deduct TDS. Finally, deducted the TDS on 10th October, 2016. The TDS at 1% on this transaction is Rs.60,000. Here, the delay is for 3 months August (part of a month is considered as full one month), September and October (part of a month is considered as a full one month). Therefore, penalty @ 1% per month on Rs.60,000 for 3 months will be calculated as below.
Rs.60,000 x (3 x 1%)=Rs.1,800.
2) If the buyer failed to deposit TDS amount with Government-Penalty of 1.5% per month (or part of thereof) from the date on which tax was collectible to the date of actual deposit.
Let us take an example for the same. Mr.X purchased a property worth Rs.60 lakh on 20th August, 2016. He deducted the TDS. But failed to deposit the same in Government before 7th September, 2016. Finally, deposited the TDS on 10th October, 2016. The TDS at 1% on this transaction is Rs.60,000. Here, the delay is for 3 months August (part of a month is considered as full one month), September and October (part of a month is considered as a full one month). Therefore, penalty @ 1.5% per month on Rs.60,000 for 3 months will be calculated as below.
Rs.60,000 x (3 x 1.5%)=Rs.2,700.
Along with above penalty of interests, the late fee of Rs.200 per day will be levied subject to the maximum of the amount of tax is to be levied for late filing of TDS .
Let us tax the same above example, if Rs.60,000 TDS was deducted TDS on 20th August, 2016. But failed to deposit the same in Government. Finally, deposited the TDS on 10th October, 2016. But the same is to be deposited on or before 7th September, 2016. Then the penalty is calculated as below.
The number of days from 20th August, 2016 to 10th October, 2016=51 days.
Late fee=51 x Rs.200=Rs.10,200 or Rs.60,000 (TDS amount) whichever is lower. Hence, the late penalty will be Rs.10,200.
Hope this much information is enough for understanding the process on how to pay TDS on sale of property online.
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View Comments
Hi.. I have submitted TDS and payed through BANk but mistakenly put the amount under Fee26QB. How can i get this corrected to reflect under Tax
Dear Puneet,
Raise and issue with IT Dept.
While doing payment through sbi internet banking, it is asking for payment amount and lot many values are present. I need to payment for TDS on property, in which field, payment need to enter? Fields are tax, surcharge, penalty, educational cess and fee 26qb Etx.
Dear Ravi,
It is in tax.
Hi Basava,
Thanks for all the useful informations shared here in advance.
I am a NRI seller and buyer is Resident indian. I wish to sell my property in India for 95 Lakhs with a single/one-time bank transfer. The property can't be registered as it is sharing a temple land disputes. However the transactions in those places are through power of attorney with notary.
1) what is the amount that will be need to be considered by the buyer for TDS ( assuming 20.66% for NRIseller as per the info above) & ( no sale deed and just POA without registration).
2) How to claim back the TDS amount from the IT dept...( suppose through my auditor, I am showing Cost Inflation Index and with remaining money I want to deposit in capital bond/buy new house, if the TDS amount ( in this case 19L is locked in IT dept) how can I unlock this money to purchase new property or deposit in capital bond.
3)How long will IT dept take to return the TDS money?
4) If I dont want to repatriate can i take this money in resident acoount or is it mandatory for NRO a/c?
Lakshmi-In my view, Power of Attorney means just give some power but not ownership. Hence, it is not considered as sale and in my view no TDS also. However, I suggest you to consult a CA before proceeding further.
Thanks for quick response. I just checked with auditor
Auditor suggests (Power of attorney --sale with possession) and that can be considered for filing tax
Since I have no intention of repatriation,auditor suggests to get the money in resident account and pay the tax according to the calculations.This is legal and acceptable it seems.
Not sure on the second point-feel little doubtful.
Lakshmi-Then go ahead as per your auditor's advice.
Hi, I have bought a home from builder with consideration value of 1.2Cr jointly with my wife (50:50). The TDS for this will be 1,20,000/-. Now, if we both pay 60,000 each as TDS, we will be individually paying only 0.5% TDS of the consideration amount. My question is: while filling form 26QB, do i mention TDS as 1% or 0.5% (in the box: "Please enter TDS rate (in %)*").
Prabhu-You have to mention 1% because the ownership also be divided right?
I'm purchasing a flat cost Rs.5266000/= . there are 2 sellers . I'm paying 1629000/= for 1 seller and 3637000/= for another seller. I have planned to execute 2 form 26QB for each seller as below with seller 1 and seller 2 details.
Seller 1:Total Amount paid for 1 seller * =1629000 ;Basic Tax [to be paid] = 16290
Seller 2: Total Amount paid for 2 seller * =3637000;Basic Tax [to be paid] = 36370
Is this correct ?? is my understanding correct.
Vinod-Yes. However, if the property is SINGLE, then why two SELLERS? You can treat them as a single entity.
Sorry , 2 sellers =Joint owners of the single property.
Vinod-Then in that case you have to use two forms as you mentioned above.
Thank you very much Sir for your quick help and confirmation.
Hi,
I had paid an booking amount in month of august 2017 - 6 lac. The sale agreement was done on Nov 18 2017 where in agreement it was mention by builder that 6 lac is received and no date of received was mentioned. I had to pay 30% of sale agreement which is 60 lac. My remaining amount is being paid by bank before 19-Dec-2017 they will release it to builder.
1) So am i supposed to pay two times over here -- one for the amount paid by me (6 lac) and another when bank releases the said amount .
2) Can i club both amounts and pay TDS after 19 Dec 2017 , if yes what date should i enter in Date of payment/credit (Date of payment to the transferror/seller) And also what will be the date of tax deduction ?
3) Do i get penalty on the earlier paid 6 lac amount as agreement was done on Nov 18 2017, if i pay now?
Regards,
Mac
Mac-You can deduct the TDS for both payments at once. However, I think you have to pay the penalty for the earlier Rs.6 lakh as it is your fault of not deducting the TDS.
Thank you very much for response .
One last query what date should i enter in Date of payment/credit (Date of payment to the transferror/seller) .
Is it should be the date of last installment ?
Mac-Yes the date as per you paid to builder.
Hello Basavaraj,
I had booked a flat above 50Lacs and 5Lacs was given as booking amount. Recently on 3-October-2017, i paid 35Lacs at one go without deducting the TDS. My querries are per below
1- Whether TDS penalty on booking amount of 5lacs is still applicable?
2- What is the time limit to deposit the TDS?
Dilip-1) Yes.
2) TDS has to be deposited along with Form 26QB within 7 days from the end of the month in which TDS was deducted.
Hi,
I wanted check no. of separate TDS forms 26QB to be paid in below case:
There are 2 buyers (couple) & 2 sellers (couple) for this property. Do I need to divide total TDS payable amount (1% of agreement value) into 4 combinations (4 equal tax payments) with each buyer & seller's combination?
Anand-Divide based on the % of ownership (as per my knowledge).
Dear Basu,
Is TDS considered on Sale Agreement amount or Sale Deed Amount?
IN BAngalore, Builders generally mention more amount in Sale agreement and less in Sale deed.
If Sale deed (original registration) amount is less than 50 lakh, do we need to pay TDS?
PLease comment.
THanks,
Pradipta
Pradipta-TDS should be on sale deed. As I already mentioned above, if the property sale (deed) is less than Rs.50 lakh, then there will not be any TDS. But avoid such bad practices where builders get benefit and you be in trapped in long run due to higher capital gain taxes when you sell the same.
The sale consideration (Rs. 70 Lac) is paid in 2 months as below:
1. July: 4 installments of Rs. 20 Lac, Rs. 15 Lac, Rs. 4 Lac & Rs. 21 Lac (on different dates),
2. August: Last installment of Rs. 10,00,000.
Question:
For the month of July, will a single 26QB be sufficient? Or will I need to file 4 separate 26QBs?
Rohit-A single is enough.