TDS on sale of property means the buyer of the property is required to deduct TDS before making payment to the Seller at the rate prescribed in the act. Our Tax Specialists help you in Payment of TDS on Sales of property and to get Challan 26QB, Form 16B and TDS Certificate. Schedule Appointment with Our Experts
As per Section 194IA of Income Tax Act ”TDS on Sale of Property”, a buyer of the property is required to deduct tax at the rate of 1% of the Sale Consideration only if the Sale consideration is equal to or more than Rs.50 lakhs. If the sale consideration is less than Rs.50 lakhs then no TDS is required to be deducted. Any transferee (buyer) is responsible for paying to a resident transferor (seller) any sum in the name of sale consideration for the transfer of immovable property is required to deduct TDS at the time of credit of such amount or at the time of payment whichever is earlier. If the sale consideration is paid in installments then TDS is to be deducted at the end of each installment.
‘Consideration for immovable’ property shall include all charges like 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 the transfer of the immovable property. This is applicable for immovable property purchased on or after 1 September 2019 as per Budget 2019.
An Annual Information Return (AIR) is obtained by the Income Tax Department from the registrar/sub-registrar office regularly. From this report, the IT department can figure out the property sale transaction exceeding Rs.50 lakhs. So if a buyer does not deduct TDS at 1% or if he does not file the TDS return and deposit it to the government within the specified time then a notice will send to the buyer by the income tax department.
IF default continues for more than one year then an additional penalty of Rs.10000 to Rs.100000 is to pay under Section 271H.
The Form 26QB challan has to be filled by each buyer for every unique buyer-seller combination for their respective share. So if there are 2 buyers and 2 sellers’ four separate forms have to be filled. A seller of the property can claim the TDS deducted on an immovable property at the time of filing their income tax return. In a case where a refund arises due to TDS on sale of a property, the refund can be claimed through an ITR filing.
