As per the provisions under Section 194-IA of Income Tax Act, 1961, when an individual buys immovable property worth more than Rs. 50 lakh, he or she has to deduct TDS when paying the seller. The TDS amount is paid to the government by filing Form 26QB in under 30 days from the month’s end for which TDS was deduction was initiated.
For example, if a transaction was initiated on June 15th, 2020, the TDS amount must be paid to the government by July 31st, 2020. However, it is essential to note this TDS deduction and payment is only applicable if an immovable property was purchased after June 1st, 2013. If formalities involving the property were completed before the date, filing TDS is not required as per the Income Tax Act provisions.
Section 194-IA of Income Tax Act 1961 set a few rules related to buying and selling immovable property such as land, building, and more. They are as follows:
Please note that the concerned land will not be considered as agricultural if these two conditions are true:
|Distance from Cantonment Board or Municipality||Population|
|Up to 2 kms||Minimum of 10,000 but not exceeding 1,00,000|
|Up to 6 kms||Minimum1,00,000 but exceeding 10,00,000|
|Up to 8 kms||Above 10,00,000|
The table given below gives the penalty charges associated with Form 26QB:
|1% interest is levied on the amount that is not deducted by the buyer for TDS||If TDS is deducted|
|1% interest is imposed per month on the non-remitted TDS amount.||If TDS is deducted but not paid to the government|
|As per the provisions of Section 234E, taxpayers have to incur penalty charges of Rs. 200 per day in case of late filing of TDS.||In case of delay in filing TDS|
|Penalty ranging from Rs. 10,000 to Rs. 1 lakh as per Section 271H can be charged. However, no penalty charges will apply if TDS is paid along with interest, fees and the required statement within the specific time frame.||Under Section 271H of Income Tax Act 1961, penalty charges can only be charged as per this section if a required statement is not submitted within the specified time.|
Buyers must follow the steps given below to pay TDS online:
Step 1: Visit the official website of TIN NSDL.
Step 2: Navigate to TDS on sale of property and click on “Online Form to File TDS”.
Step 3: Choose the challan as per applicability.
Step 4: Enter all details as required. Users should be keeping these documents handy:
Step 5: After entering all the required information, submit the form and click on confirm after a confirmation screen appears. An acknowledgment number is displayed on the screen. It is recommended that one saves it for future reference.
Step 6: After confirmation, click on the Print form 26QB online option to take a printout.
Step 7: Click on the “Submit to the bank” option to make the payment via the net banking platform which is available for a list of authorised banks.
Step 8: Once the payment is complete, a challan is generated, which consists of CIN, bank name and other payment details.
Here are some authorised banks through which one can make payment of TDS –
As noted above, after payment of TDS, a buyer has to issue Form 16B to the seller within 15 days in lieu of TDS amount paid to the government.
Form 16B can be downloaded 5 days after filing Form 26QB by following the steps mentioned below:
Step 1: Visit the official TRACES website.
Step 2: Register and log in to the TRACES portal using PAN details.
Step 3: Enter all information about the transaction involving the property.
Step 4: Enter the Acknowledgment Number, Assessment Year, and PAN of the seller. Then click on proceed.
Step 5: Click on “Submit Request”.
Step 6: Once the download request is submitted, note down the download request number.
Step 7: Click on the “Requested Downloads” and search with the download request number to find Form 16B.