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TDS on Property – 26QB Filing Services

TDS on Property (26QB) filing is mandatory for buyers of immovable property exceeding ₹50 lakh. As per Section 194-IA of the Income Tax Act, 1% TDS must be deducted from the sale consideration and deposited with the government. Timely compliance helps avoid penalties and legal complications.

Requirements

The property value must exceed ₹50 lakh
The buyer must deduct 1% TDS before making payment to the seller
TDS must be deposited within 30 days from the end of the month in which payment is made
Form 26QB must be filed online through the TRACES portal
The buyer must issue Form 16B as proof of deduction to the seller

Benefits

Ensures legal compliance and prevents tax evasion
Avoids penalties and interest on late deductions
Helps maintain clean financial records
Necessary for smooth property transactions
Generates Form 16B for the seller as proof of tax deduction

What is TDS on Property?

Tax Deducted at Source (TDS) on property refers to the deduction of a pre-determined percentage of tax by the buyer of an immovable property from the amount paid to the seller. This amount gets deposited to the government account on behalf of the seller.

Who is responsible for TDS on Property?

Buyer: It is the responsibility of the buyer to deduct TDS at the time of making any payment to the seller for the property purchase.
Seller: The seller needs to provide their PAN details to the buyer to receive the payment afterTDS deduction.

When is TDS on Property applicable?

Threshold Limit: TDS applies only if the sale consideration of the property exceeds Rs. 50 lakh.
Type of Property: Applies to both residential and commercial properties.
Payments Covered: Applicable to all payments made towards the purchase, including advance payments, full payment, and installments.

What is the Rate of TDS on Property?

Current Rate: 1% of the sale consideration.
Special Case: If the seller doesn't furnish their PAN, the buyer needs to deduct TDS at a higher rate of 20%.

How to File TDS on Property?

Deduct TDS: Calculate the required deduction based on the sale consideration and apply the appropriate rate (1% or 20%).
Submit Form 26QB: Within 15 days from the month of deduction, the buyer needs to file Form 26QB electronically on the TIN website.
Deposit the Deducted Amount: Pay the deducted TDS amount to the government account through authorized banks.
Issue TDS Certificate: Generate and issue Form 16B to the seller, reflecting the tax deducted and deposited.

Consequences of Non-Compliance:

Non-compliance with TDS on property can attract penalties for both the buyer and the seller. Penalties may include:

Buyer: Fine of 1% of the deducted amount per month for delayed filing.
Seller: Interest at 1% per month on the tax payable from the due date.

Additional Points:

It's advisable to consult a tax professional or financial advisor for specific guidance and assistance with TDS on property transactions.
Keep relevant documents related to the property purchase and TDS deduction for future reference.
Utilize online tools and resources provided by the tax authorities for simplified TDS filing and compliance.
You can also take expert service of company mitra

Document Required

PAN Card of buyer & seller
Property purchase agreement
Payment details (installment/bank transfer details)
Buyer’s and seller’s Aadhaar Card (if applicable)
Contact details of both parties

Professional Fees

~~₹3,000.00~~ ₹1,500.00

Additional Cost

Process time

⏳ TDS on Property – 26QB filing typically takes 3 to 5 working days, depending on document verification and processing.

Steps

⏬ Submission of required documents
⏬ Verification of buyer and seller PAN details
⏬ Calculation of 1% TDS based on sale value
⏬ Filing of Form 26QB on the TRACES portal
⏬ Payment of TDS to the government
⏬ Generation of Form 16B for seller’s reference

FAQ

👉 Who is responsible for deducting TDS on property transactions?
The buyer is responsible for deducting and depositing the TDS.

👉 When should TDS on property be paid?
It must be paid within 30 days from the end of the month in which the payment was made.

👉 What happens if I don’t deduct TDS?
Interest and penalties will be levied on the buyer for non-compliance.

👉 Is TDS applicable to agricultural land?
No, TDS is not applicable if the land is classified as agricultural.

👉 How can I generate Form 16B?
After filing Form 26QB and making the payment, Form 16B can be downloaded from TRACES.

👉 Can I claim a refund if excess TDS is deducted?
Yes, you can claim a refund while filing your Income Tax Return.

👉 What if there are multiple buyers or sellers?
Each buyer must file a separate Form 26QB for their share of the property.

👉 Is TDS applicable on under-construction properties?
Yes, TDS is applicable on both under-construction and completed properties.

👉 Can I pay TDS in installments?
Yes, TDS must be deducted and deposited for each installment paid to the seller.

👉 What if the seller does not provide a PAN?
TDS will be deducted at a higher rate of 20%.

👉 How can Company Mitra assist with TDS filing?
We ensure accurate filing, timely tax payment, and proper documentation for compliance.

Compliances

📌 Who Needs to Deduct TDS on Property?

Any buyer of immovable property (other than agricultural land) must deduct TDS at 1% if the sale value exceeds ₹50 lakh.
The buyer is responsible for deducting and depositing TDS, not the seller.

📌 Due Date for TDS Payment & Form 26QB Filing

TDS Payment & Filing Deadline: Within 30 days from the end of the month in which TDS was deducted.
Example: If the property purchase is in March 2024, TDS must be deposited and Form 26QB filed by 30th April 2024.

Penalties