(Q.1)What is TDS on property?
- Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon.
(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, both, is less than fifty lakh rupees.
(3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.
Explanation - For the purposes of this section-
(a) "agricultural land" means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;
(aa) "consideration for transfer of any 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;’
(b) "immovable property" means any land (other than agricultural land) or any building or part of a building. (Q2.)What are the points to be remembered by the Seller of the Property?
- Following are the points to be remembered by the seller of the property-
1:-Provide a copy of PAN card to the purchaser of the property for furnishing information regarding TDS to the Income Tax Department.
2:-Verify taxes deducted by the purchaser in Part IV of your form 26AS / Annual Tax Statement.
3:-Compare it with form 16B issued by the Purchaser.
4:-Download form 16B from TRACES only. (Q3.What are the points to be remembered by the purchaser/buyer of the property?
- Buyer should keep following points in consideration while buying a property: -
1: TDS needs to deduct on 'Amount Paid/Credit' or 'Total Stamp duty value of the Property' whichever is higher.
2: Collect the permanent account number (PAN) of the seller and verify the same with the original PAN card.
3: PAN of seller as well as purchaser/buyer should be mandatorily furnished in the online form 26QB (statement cum challan form) for furnishing information regarding the sale transaction of valid PANs.
4: Verify tax deducted and deposited from Part VIII of your form 26AS/Annual Tax Statement.
5: Note down 9 digits alphanumeric acknowledgment number generated on filing of 26QB which is required for placing request of form 16B.
6: Download form 16B from TRACES portal and issue it to the seller of the property
In case of any error committed while filing form 26QB by the buyer :-
Buyer can file online correction from TRACES website after login in as taxpayer. To know the procedure of 26QB corrections please refer to the e-tutorials of '26QB correction' available on TRACES (www.tdscpc.gov.in) website. (Q4.)On which amount TDS needs to be deducted? - TDS needs to deduct on 'Amount Paid/Credit' or 'Total Stamp duty value of the Property' whichever is higher.
Scenario 1: If buyer has chosen "Payment Type" as "Lump sum" then below field is mandatory:
In Case of "Payment Type": Lump sum then TDS needs to deduct on 'Amount Paid/Credit' or 'Total Stamp duty value of the Property' whichever is higher.
For e.g.:
A. Total Value of Consideration (in Rs.) = 100,00,000
B. Amount Paid/ Credit (in Rs.) = 90,000
C. Total Stamp Duty Value of the Property (in Rs.) = 80,000
D. Amount on which TDS to be deducted= 90,000 (auto-populated on the basis of value whichever is higher in Amount Paid/Credit Currently or Stamp Duty Value)
Note: Proportionate Value should be entered in Total Stamp Duty Value of the Property in case of multiple buyer or seller
Scenario 2: If "Payment type" is "Instalment" and Last Instalment Flag is "Y" (Yes) then below fields are mandatory to fill:
In case of 'Payment Type': Last Instalment then TDS Needs to Deduct on Amount Paid/ Credit + Total amount paid/ credited in previous instalments, if any (in Rs.) or Total Stamp Duty Value of the Property whichever is higher
For e.g.:
A. Total Value of Consideration = Rs. 1,00,00,000
B. Total Stamp Duty Value of the Property = Rs. 90,00,000
C. Payment in instalment or lump-sum = instalment
D. Whether it is last instalment -Yes
E. Amount paid/ credited currently = Rs. 30,00,000
F. Total amount paid/ credited in previous instalments = Rs. 70,00,000 Amount on which TDS to be deducted = Rs. 1,00,00,000 (auto-populated on the basis of Higher Amount between [(E + F) or B
Scenario3: If "Payment Type" is "Instalment" and Last Instalment flag is 'N' (No) then below fields are mandatory to fill:
In Case of "Payment Type": Instalment then TDS needs to deduct on 'Amount Paid/Credit'
For e.g.:
A. Payment in instalment or lump-sum = instalment
B. Whether it is last instalment -No
C. Amount paid/ credited currently = Rs. 40,00,000
D. Total amount paid/ credited in previous instalments, if any (in Rs.) = 70,00,000
E. Total Stamp Duty Value of the Property (in Rs.) = Zero or any value (Non mandatory in case of Payment Type: Instalment)
F. Amount on which TDS to be deducted= 40,00,000 (auto-populate on the basis of Amount Paid/Credit Currently) (Q5.) What is the due date of filing in case of 26QB?
- As per rule 30(2A), notwithstanding anything contained in sub-rule (1) or sub-rule (2), any sum deducted under section 194-IA shall be paid to the credit of the central government with in a period of 30 days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in form No. 26QB.
(Q6.) How will transactions of joint parties (more than one buyer/seller) be filed in Form 26QB?
- Online statement cum challan form 26QB is to be filled in by each buyer for unique buyer-seller combination for respective share.
1: 26QB.
Example: In case of one buyer and two sellers, two 26QB (statement cum challan) forms must be filled and for two buyers and two sellers, four 26QB (statement cum challan) forms must be filled for respective property shares.
2: Form 16B
Example: Ram and Shyam are the buyers /purchaser and Sohan and Mohan are the sellers. Ram will issue separate form 16B to Sohan and Mohan each. Shyam will issue separate Form 16B to Sohan and Mohan each. So, in this way four forms have to be filled in for respective property shares.
(Q7.) In which part of 26AS/Annual Tax Statement TDS deducted on immovable property will appear? - : Amount deducted will appear in Part-A2 of 26AS/Annual Tax Statement of the "Seller" and in Part-F of 26AS/Annual Tax Statement of the "Buyer".
: Amount deducted will appear in Part-IV of 26AS/Annual Tax Statement of the Seller and Part-VIII 26AS/Annual Tax Statement of the Buyer. (Q8.) While filing form 26QB I mentioned tax amount in "Other" or "Education Cess" column. How can I rectify?
- TDS amount will be automatically updated by the department even if it is mentioned in "Other" or "Education Cess" column.
