Steps To Pay TDS on Property

In case of immovable property sales, the tax deducted at source (TDS) is set to 1% of purchase amount if it exceeds Rs.50 lakh. It is to be paid at the time of transaction. The buyer not only has to pay TDS but also provide a TDS certificate to the seller.

Payment and filing for TDS has been simplified due to the e-payment feature. Buyers can simply log in, select appropriate forms and proceed to pay TDS via net-banking or with a debit card.

Here are some perquisites and steps to pay TDS on property.

Important aspects associated with TDS payment

  • PAN details

It is the responsibility of the buyer to obtain PAN details from the seller. In case the seller is not able to provide any PAN information, TDS on property purchase above 50 lacs increases from 1% to 20%.

  • Payment

TDS on purchase of a property can be paid online or by directly visiting central government authorised financial organisations. Nonetheless, the process needs to be initiated by visiting the official website.

  • Form 26QB

To file for a tax return on a TDS payment, buyers have to fill Form 26QB. It is the return cum challan form used specifically for TDS returns and buyers must submit it before they can proceed with payment.

  • TDS certificate or Form 16B

After successful payment of TDS, this form can be downloaded from the website, usually after 10-15 days. It signifies that the seller is clear of all TDS liabilities against the property sale.

Steps to pay TDS on property online

  • To initiate TDS payment, the buyer must first visit the official website.
  • Select the ‘TDS on sale of property’ option from the ‘Services’ menu.
  • In the next screen, select ‘Online form for furnishing TDS on property (Form 26QB)’.
  • Click TDS on property (Form 26QB) in the lower-left corner of the page.
  • Corporate and non-corporate buyers must choose Challan No./ITNS 281.
  • Fill up the form as per instructions and click ‘Submit’ once you are done.
  • After confirming your submission, you will see the option to print Form 26QB and submit it for online payment. There will also be an acknowledgement number which you should note down for future reference.
  • You can either pay via net banking or by visiting authorised financial organisations. A list of such institutions is available online.
  • The system generates a counterfoil upon successful payment of TDS. It contains a challan identification number (CIN), payment details along with the name of the bank via which the payment was made.

Steps to download TDS certificate

After successful payment of TDS, buyers have to download a TDS certificate and issue it to the seller. Here are the steps to do so,

  • Register on TRACES portal with your PAN details.
  • Under ‘Downloads’ select ‘From 16B (For buyer).
  • Enter all necessary details and click on ‘Proceed’. Submit the form.
  • Note the request number for future references.
  • Search for your request in ‘Requested Downloads’ section. Download the file and provide it to your seller.

Confusion associated with TDS and property tax

Taxpayers often confuse property tax with TDS. Nonetheless, the two are entirely different.

Property tax is collected by the local Municipal Corporation or local government. It also varies among different states. Such as house tax Delhi is collected according to a rating system, whereas in Mumbai, it is based on a central value system.

It includes all real-estate properties an individual owns, such as their home and offices. Property owners should keep track of tax receipts as it is often required by lenders when applying for a loan against property.

One must also be wary of charges associated with a loan against property, as these can significantly affect your loan repayment experience.

With the introduction of the e-payment facility, paying TDS on property has become even simpler. Buyers are advised to collect all of the seller’s information including their PAN details when filing for tax TDS. Any problems faced during payment can be relayed to the tax information network via mails or direct calls.

Richa Sharma is a freelance author and writes for a variety of online publications. She actively writes blogs and articles and very fond of writing content on different trendy topicss related to Education, training,resources,health and technology.