According to the Finance Bill of 2013, TDS applies to the sale of immovable property, wherein the cost of sale is equal to or greater than Rs. 50,00,000. Sec 194 IA of the Income Tax Act, 1961, states that, beginning from June 1, 2013, tax at 1% shall be deducted by the buyer while making the payment for the property. For paying TDS, the seller has to obtain Form 16B, while the buyer has to obtain Form 26QB.
Requirements Laid Out in Section 194-IA
- The individual purchasing the property has to subtract TDS at the rate 1% from the overall sale consideration. An essential point to be noted is that the buyer has to deduct the TDS, not the other party.
- TDS shall not be deducted if the sale amount is below Rs. 50,00,000. In case the payment is made in instalments, TDS will have to be reduced from every payment.
- Tax is applicable on the entire sale amount - even when the buyer or seller is more than one.
- TDS has to be deposited along with the duly-filled Form 26QB within 30 days from the month end in which TDS was deducted.
- PAN card is mandatory for the seller. If the seller is not able to provide the PAN card, then 20% TDS is applicable.
- After the TDS is paid, the buyer needs to provide the seller with the TDS certificate. This can be accessed in about two weeks from the date that TDS is deposited.
- It is not mandatory for the buyer to obtain a TAN number.
Payment Through Challan 26QB (Online and Offline)
To make the payment through Challan 26QB, here is what you need to do:
- Step 1 - Go to onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
- Step 2 - Click on Form 26QB.
- Step 3 - Select 0020 if you are a corporate taxpayer. Others can click on 0021.
- Step 4 - Fill up the empty blanks and click on Proceed.
A confirmation screen shall appear. The user will be presented with two options -"Print Form 26QB" and "Submit to the bank". A unique acknowledgement number will also be displayed. Keep a record of this acknowledgment number for future use. Press on "Print Form 26QB" for taking a copy of the form.