How to make payment of TDS on sale of property?

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How to make payment of TDS on sale of property 

As per section 194I-A of Income Tax Act, when a buyer buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50lakhs, he has to deduct TDS when he pays the seller

Prerequisites to be noted u/s 194I-A

  • The buyer has to deduct TDS at 1% of the total sale consideration. Note that the buyer is required to deduct TDS, not the seller.
  • No TDS is deducted if sale consideration is less than Rs 50lakhs. If installments are being paid TDS has to be deducted on each installment.
  • Tax is to be paid on the entire sale amount. For example, if you have bought a house at Rs 65lakh, you have to pay tax on Rs 65lakh and not on Rs 15lakh (i.e. Rs 65lakh – Rs 50lakh). This is applicable even when there is more than 1 buyer or seller.
  • The due date of payment of TDS on transfer of immovable property is 30 days from end of the month in which the deduction is made.  This TDS has to be deposited along with Form 26QB

 

FORM 26QB

  • Every person responsible for deducting TDS is required to obtain TAN. Tax deduction and Collection Account Number is a ten-digit alpha-numeric unique identification number allotted to the deductor and must be quoted in all communication of the deductor thereby.

 

  • As the government has everything for everyone, for those who don’t have TAN under section 194IA, the payment of tax is to be filed with the help of Form 26QB and then issuing a certificate for tax deduction under Form 16B. Form 26QB is available in the e-payment section of Tax Information Network (TIN) of the Income Tax Department

 

  • TDS has to be made at the time of each credit/ payment to the seller’s account. Which in turn is to be deposited to the government account by way of a return cum challan (Form 26QB) within 30 days of the next month? In case if the buyer fails to deduct the taxes or deposit the same to the government account he will be considered as assessee in default and may get the notice for non-filing of Form 26QB.

 

Steps to make payment through challan 26QB

 

STEP 1: Go to https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp


STEP 2 Click on Form 26QB and select 0020 if you are corporate payer and 0021 if you are a non-corporate payer. Fill in all the necessary details.

 

STEP 3: There are 2 modes of payment at the bottom of the page: e-tax payment immediately (through net banking facility) and e-tax payment on the subsequent date (e-payment of taxes by visiting any of the Bank branches). Choose the one which you prefer and click on Proceed.

 

NOTE: If you choose net-banking, you will be able to login to your bank and pay online. After you have paid, the bank lets you print Challan 280 with a tick on 800 (i.e. payment of TDS on sale of property). Print this out and keep it safe.

If you cannot pay online, an online receipt for Form 26QB with a unique Acknowledgment Number is generated for you. This is valid for 10 days after generation. You can take this to one of the authorized banks along with your cheque. The bank will proceed with the online payment and generate your challan.

 

 

FORM 16B

 

Form 16B is a TDS certificate for TDS deducted on a sale of property. Once the buyer makes the payment of TDS on behalf of the seller, a TDS certificate gets generated after a few days of making the payment. The buyer can then download this certificate also known as Form 16B and give it to the seller as a proof of TDS submission.

 

How to Generate and Download Form 16B

          STEP 1: If you are a first-time user, register on TRACES as a Taxpayer with your PAN Card Number            and the Challan number registered during payment.

 

            STEP 2: Once you register, whether you are a seller or a buyer, you will be able to obtain your     approved Form 16B. Check your Form 26AS seven days after payment. You will see that your payment is reflected in “Part F” under “Details of Tax Deducted at Source on Sale of Immoveable Property u/s 194(IA) [For Buyer of Property]”.

 

          STEP 3: After your payment starts reflecting in Form 26AS, you can download your Form 16B. Login to TRACES, go to “Download” tab and click on Application for Request of Form 16B if the status of your Form 16B download request is “Available to download” your Form 16B.

 

        STEP 4: You should be able to see that the status of your Form 16B download request is Available. If status says Submitted, wait for a few hours more before repeating the last step. Download the “.zip file“.

 

       STEP 5: Open the “.zip file“. The password to open the Form 16B file is Date of Birth of Deductor (the format is DDMMYYYY). Your form will be available inside the .zip file as a pdf.

 

By

Maitri Badani

(Article Assistant)

(Team SSRPN, Company)

 

 



 

  

 

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