TDS on Purchase of Immovable Property in India.

Tax Deducted at Source (TDS) is a mechanism that the Indian government uses to collect tax
revenue. The person who is making payment is liable to deduct and deposit TDS. we have captured
all about TDS on purchase of immovable property in India, the applicable forms, the TDS rate, and
the steps to file Form 26QB.

Contents:

1. Applicability of Sec 194IA, TDS Rate and Threshold limit:

2. Applicable Forms and Payment of TDS:
3. Documents are required to file Form 26QB:
4. Steps to fill form 26QB through Income Tax website (E-Filing Portal):

5. Steps to fill form 26QB through TIN NSDL Website: - presently the portal is not supporting
6. Steps to generate Form 16B/TDS Certificate:

7. Steps to generate challan receipt substantiating that TDS money is remitted to Govt.

1. Applicability of Sec 194IA, TDS Rate and Threshold limit:

Applicability: Sec 194 IA of the Income Tax Act, 1961 is applicable on any person, whether a
resident or a non-resident buying any immovable property (other than agricultural land) from a
resident seller.

TDS Rate: The TDS rate for the purchase of immovable property in India is 1% of the total sale
consideration. This rate applies to all types of properties, whether residential, commercial, or
industrial. Total sales consideration includes all charges of the nature of club membership fees,,car
parking fees, electricity and water facility fees, maintenance fees, advance fees or any other
charges of similar nature which are incidental to transfer the immovable property. even
customization expenses before registration will attract TDS U/s194IA @1%

Threshold Limit: TDS is applicable on purchase of immoveable property wherein the sale
consideration of the property exceeds or is equal to ₹ 50,00,000 (Rupees Fifty Lakhs).

Case studies/Examples in Tabular format for all the scenarios: –

Assumed Sale consideration is more than Stamp duty valuation of the property.
2. Applicable Forms and Payment of TDS:
Time Limit to Deposit TDS: TDS @ 1% should be deducted by the purchaser of the property on the
Date of Payment or Credit to the Seller whichever is earlier. Tax so deducted should be deposited to
the Government through challan-cum-statement in Form No. 26QB electronically within 30 days
from the end of the month in which the deduction is made.
Interest and Late Fee: In case of default of non-filing or late filing of Form 26QB, a penal fee of Rs.
200 per day is applicable under section 234E and 1.5% per month where TDS deducted but not
deposited to Government.
Applicable Forms: There are two forms that are applicable when it comes to TDS on the sale of
immovable property in India. They are:
- Form 26QB: This is the form used for the payment of TDS on the sale of immovable
property. It is known as challan-cum-statement. Form 26QB can be filed through two portals
i.e., NSDL or Income Tax website. Form 26QB can be filed for each installment or Lump-sum
payment.
Note: In case of joint buyers, 26QB has to be filed by each of the buyers for proportionate share that
means two 26QB forms to be filed at the same time. And in case of Joint seller and joint buyer, four
26QB forms has to be filed.
Form 16B: This is the TDS certificate that is issued by the buyer to the seller after the TDS payment
is made. This certificate can be generated through Traces Portal. Steps given below.

3. Documents are required to file Form 26QB:

User should be ready with the following information while filling the form 26QB:-
- Seller Details (PAN card copy, Aadhaar card copy, Contact details)

- Buyer Details (PAN card copy, Aadhaar card copy, Contact details)

- Sale Deed/Agreement to Sell for property details.

- Circle value (Stamp Duty valuation) of the property

Buyer’s:
 - E-filing Portal ID & Password

- Traces Portal (Taxpayer ID & Password)

Payment Details (In case of Installments)

- Date of Payment, Amount paid, Mode for payment.

4. Steps to fill form 26QB through Income Tax website (E-Filing Portal):

Step -1 Type the url: https://www.incometax.gov.in/iec/foportal/

Step-2 Enter User ID & PW to login.

Step-3 Select e-pay Tax in e-file

Step-4 Click on New Payment

Step-5 Click on Proceed 26QB (TDS on Sale of Property)

- Now choose residential status of seller

- Add Buyer Details:

- Verify the details of buyer which are auto-fetched from the Profile section (Note- If you want
to update these details then edit in the Profile section, after update, fill the form 26QB)

- Click on yes if there is more than one purchaser of property (Joint Buyers), otherwise click
No and click continue (Note: Please fill another Form 26QB for co-buyer share)

- Add Seller Details:

- Now fill the details of seller of property (Pan No. and aadhaar no. of seller, Address details,
contact details)

- Seller Office Address: Imagine, No.78, ITPL Main Road, EPIP Zone, Whitefield, Bangalore -
560066
- Contact details: Mobile no. 9880001364 & Mail ID –
taxes.TE@totalenvmt.onmicrosoft.com

- Click on yes if there is more than one Seller of property (Joint Seller), otherwise click No and
click continue (Note: Please fill another Form 26QB for co-seller share)

- Add Property transferred Details:

- Now Fill the details of the property (Type, Address of property)

- Fill Date of agreement, Date of payment , Date of deduction and total value of the
consideration (Property value)

- Now choose payment type. If payment is on installment basis, then select yes and again yes
if it is last installment and if payment is made on lump-sum basis then last instalment option
will be disabled automatically.

- Choose yes or no whether stamp duty value is higher than sale consideration (Normally it is
always No)

- Fill amount paid/credited currently & stamp duty value of the property.

- And then it will auto-calculate TDS amount

- Click Continue

- Add Payment Details:

- In the Select Payment Mode page, there are various options, it is suggested to select
Payment Gateway mode and click Continue. In the Preview and Make Payment page, verify
the details and tax break up details and click Pay Now.

- Read and Select the T&Cs and Click Submit to Bank. (You will be redirected to the website
of Payment Gateway where you can login or enter Net Banking/ Debit / Credit Card / UPI
details and make the payment).

- After successful payment, you will receive a confirmation e-Mail and an SMS on the e-Mail
ID and Mobile number registered with the e-Filing portal. Once the payment is successful,
details of payment and Challan Receipt are available under Payment History Tab on the e-
Pay Tax page.

- After this step, payment of TDS is successful.

- Below is the list of banks through which payments can be made.

5. Steps to fill form 26QB through TIN NSDL Website: presently not working

we can file Form 26QB through TIN NSDL Website.

The following are the steps to file Form 26QB for the payment of TDS on the sale of immovable
property in India through TIN NSDL Website:

- Go to TIN Protean website (https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp).

- Scroll down and select “TDS on Property (Form 26QB)” and click on Proceed button.

- Fill the complete form as applicable: –

- Fill PAN Details of Transferee (Buyer) and Transferor (Seller)

- Fill Complete Address of Transferor & Transferee

- Seller Office Address: Imagine, No.78, ITPL Main Road, EPIP Zone, Whitefield, Bangalore -
560066

- Mobile no. & mail ID is not a mandatory for Transferor (Seller)

- Fill Details of Property purchased like location of property etc.

- Fill Amount paid/credited & tax deposit details

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. You can use this acknowledgement number to
download Form 16B, which is the TDS certificate that needs to be issued to the seller.
 Click on “Print Form 26QB” to print the form. Then click on “Submit to the bank” to make the
required payment online. You will be directed to the payment gateway where you can make the
TDS payment using any of the available modes of payment, such as credit card, debit card, or
net banking.
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.
After this step, payment of TDS is successful.

Below is the list of banks through which payments can be made.

6. Steps to generate Form 16B/TDS Certificate:

Deductor has to furnish Form 16B to the payee within a period of 15 days of filing Form 26QB.
(Note: Proceed to TRACES portal( www.tdscpc.gov.in) after 4-5 days from the date of payment
,download Form 16B.)

- If you have deposited TDS on immovable property for the first time then you have to Register
yourself as a Taxpayer on Traces portal (https://www.tdscpc.gov.in/app/tapreg1.xhtml)

- And If have user Id and password for this portal already, then login on TRACES portal as
taxpayer using your PAN. (https://www.tdscpc.gov.in/app/login.xhtml)

- Select “Form 16B (For Buyer)” under “Downloads” menu.

- Enter the details pertaining to the property transaction for which Form 16B is to be
requested. Enter the Assessment Year, Acknowledgment Number of Form 26QB, PAN of
Seller and click on “Proceed”.

- A confirmation screen will appear. Click on “Submit Request” to proceed.

- A success message on submission of download request will appear. Please note the request
number to search for the download request.

- Sometimes it takes around 30 minutes to process the request.

- Then again login the Traces portal and Click on “Requested Downloads” to download the
requested files.

- Search for the request with request number. Select the request row and click on “HTTP
download” button.

- You can extract Form 16B pdf and share this with the Seller of the property for proof of TDS
payment. (Form 16B should be signed by the buyer)
7. Steps to generate challan receipt substantiating that TDS money is remitted to Govt.

Siep-1 Enter - https://www.incometax.gov.in/iec/foportal/

Click on login

Step-2 Enter User ID & PW & login

Step-3 Select e-pay Tax

Step-4 Click on payment history & select the challan