TDS on buying property in INDIA

Q: I have booked an apartment in Elita garden phase 2. Just want to let others know in India above 50L property buyers is supposed to withhold 1% tax and pay 99% on each payment to builders. Elita did not inform about this and accepted 100% payment for few installments. Not sure if anyone out there still not aware about the rule. Penalty is on buyers of not withholding the tax. Elita simple hide it until I inquire about it.

PKC, Kolkata

22nd March 2016

Property Tax in Kolkata

tds on property sale @ 1% under section 194ia

tds on property

tds on property buying

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Replies (3)

Good afternoon everybody!!!!!!
As per the Income Tax Act, tax must be deducted at source by the buyer of a property from payments made to a seller who is resident in India. TDS must be deducted on sale of all types of property, except where the property sold is an agricultural land. TDS is applicable when receipts are of more than Rs 50 lakh. This TDS must be deducted 1% by the buyer at the time of making the payment.

Bhuvan, Delhi-NCR

23rd March 2016

Comment

Yes, but remember that no surcharge or cess charge is applicable on this 1% TDS deducted. TDS must be deposited within 7 days of TDS deduction. A Form 26QB is required to be submitted by the buyer to the income tax department where PAN of both the buyer and seller must be compulsorily specified. This TDS amount appears both in Form 16B issued by the buyer as well as in the seller's Form 26AS.

Subhajit Rao, Kolkata

23rd March 2016

Hi folks,
And the rate at which the buyer needs to deduct tax is 1% and it may go up to as high as 20% if the seller does not disclose his PAN. This rule also covers the property purchased through home loan.

Kunal,

23rd March 2016

Comment

you are right sir.
As per the rules, the buyer of the property is required to deduct Tax and deposit the same with the Government. TDS needs to be deducted for all the earlier payments made to the seller and if the payments are being made in installments then at the time of every installment.

Kaustav Paul, Kolkata

23rd March 2016

Comment

But one thing always keep in mind that If the amount of property you have purchased is Rs 60 lakhs, then you dontt have to pay tax only on Rs 10 lakhs but on the entire amount of sale consideration i.e. Rs 60 lakhs.

Sajal Das, Kolkata

23rd March 2016