TDS on Property -FAQ and Points to Remember

As per Finance Bill of 2013, TDS is applicable on sale of immovable property wherein the sale consideration of the property exceeds or is equal to Rs 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration. Tax so deducted should be deposited to the Government Account through any of the authorised bank branches.

Points to be remembered by the Purchaser of the Property:

  1. Deduct tax @ 1% from the sale consideration.
  2. Collect the Permanent Account Number (PAN) of the Seller and verify the same with the Original PAN card.
  3. PAN of seller as well as Purchaser should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction.
  4. Do not commit any error in quoting the PAN or other details in the online Form as there is no online mechanism for rectification of errors. For the purpose of rectification you are required to contact Income Tax Department.

Points to be remembered by the Seller of the Property:

  1. Provide your PAN to the Purchaser for furnishing information regarding TDS to the Income Tax Department.
  2. Verify deposit of taxes deducted by the Purchaser in your Form 26AS Annual Tax Statement.

Frequently Asked questions (FAQ)

What is TDS on property?

The Finance Bill 2013 has proposed that purchaser of an immovable property (other than rural agricultural land) worth Rs 50 lakh or more is required to pay withholding tax at the rate of 1% from the consideration payable to a resident transferor

Who is responsible to deduct the TDS on sale of Property?

According to rules in respect of tax deducted at source, buyer of the property would have to deduct the TDS and deposit the same in Government treasury.

I am Buyer, do I required to procure TAN to report the TDS on sale of Property?

Buyer or Purchaser of the property is not required to procure Tax Deduction Account Number (TAN). The Buyer is required quote his or her PAN and sellers PAN.

What if I dont have the PAN of the seller is it Mandatory?

PAN of the seller is mandatory. The same may be acquired from the Seller before effecting the transaction.

How can I use this facility to pay TDS on sale of Property?

The Buyer of the property (deductor of tax) has to furnish information regarding the transaction online on the TIN website. After successfully providing details of transaction deductor can:

  • Either make the payment online (through e-tax payment option) immediately;
  • Or make the payment subsequently through e-tax payment option (net-banking account) or by visiting any of the authorized Bank branches. However, such bank branches will make e-payment without digitization of any challan. The bank will get the challan details from the online form filled on www.tin-nsdl.com

If I encounter any error on NSDL site while entering the online form details what should I do?

If any problem is encountered at the NSDL website while entering details in the online form then contact the TIN Call Center at 020-27218080 or email at tininfo@nsdl.co.in (Please indicate the subject of the mail as Online Payment of Direct Tax).

 

 

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16 thoughts on “TDS on Property -FAQ and Points to Remember

  1. sudha

    My self and my husband jointly purchased a property We have to pay tax of 1% nearly Rs.80,000/- how we have to pay. Each we have to pay Rs.40,000 or only my husband can pay Rs.80,000/-

    Reply
    1. TDSMAN Post author

      Dear Madam,

      To the best of our knowledge person who has issued the cheque will have to deduct the TDS.

      Reply
  2. vinay

    Hi..i made a mistake while paying TDS for seller wherein the amount filled in Form 26QB and final payment challan are different. Can i claim a refund now for excess payment if yes how ? …kindly suggest..

    Reply
    1. Arun Kumar V

      Hi,

      I had made a property purchase for a sale consideration of Rs. 75,00,000/-. In the process of paying TDS online, I generated Form 26QB on the website of TIN NSDL for 1% of the sale consideration amount, which is Rs. 75,000/-. However, while making the payment through net banking, I had inadvertently added an extra zero¢ and made a payment to the tune of 10% [Rs. 7,50,000/-] instead of 1% [Rs. 75,000/-].

      Subsequently, I made a separate payment for 1% of the sale value [Rs. 75,000/-] and went ahead with the property registration.

      I am at my wits end trying to understand how to claim the refund of excess amount, which in my case is a huge 7.5Lakhs.

      Please help me on how to go about it as I am getting different responses from different people.

      Thanks.
      Arun

      Reply
      1. Anjali Rohra

        Dear Mr Arun Kumar,

        Please let men know if you have got any solution for your issue as am unable to analise as to whom to approach for getting the solution for the same.

        Thanks & Regards,
        Anjali Rohra

        Reply
      2. Sudhakar

        Dear Arun Kumar,
        I have similar problem however amount is not that big.

        I wish your suggestion on how you have claimed your extra TDS payments.
        Your suggestion shall be very helpful to people like me.

        Regards

        Reply
      3. Kiran N

        Dear Mr. Arun,

        Please guide me if you know how to get the refund back. I have also committed a same mistake and made an excessive payment inadvertently.

        Please suggest me the way out if you know any …..?

        Thanks

        Reply
  3. Anjali Rohra

    Hi,

    Unlike Mr. Arun Kumar V, am also in the same dilema. The amount was supposed to be Rs. 25,000/- which erronously got paid as Rs. 2,50,000/.

    Have approached the builder but have not received any cooperation from them. Had requested them to claim for refund by filling the “Form 26B” as they have the TAN Number.

    Its only the deductor who can claim Refund of excess TDS paid with the help of TAN number.

    Please suggest me alternate solution as its a substantial amount.

    Thanks & Regards,
    Anjali

    Reply
    1. Kiran N

      HEllo,

      just like Unlike Mr. Arun Kumar V and Ms. Anjali, i have also made a mistake while paying TDS for seller wherein the amount filled in Form 26QB and final payment challan are different.

      I am in a great worry since the amount erroneously paid is a huge !

      Please please let me know if there is any way to claim a refund now for excess payment if yes how ?

      Reply
    2. Chetan

      Hi Anjali and Arun,

      I have in same boat, paid more TDS than i should. Please suggest if you could find any resolution to your problem?

      Thanks,
      Chetan

      Reply
  4. Amit

    Hi,

    I bought a propert this Feb and is above 50 Lakhs from a builder who possession is yet to happen. Based on the slab completion I’ve paid the demands and subsequent TDS to government with PAN details of self & Builder.

    While filing IT returns for assessment year 2014-2015 I approached a professional who stated that this TDS is to be eventually be borne by builder and is refunding the TDS amount I paid in Feb & March.

    Can you kindly confirm the exact rule and also whether as a buyer I should get refund or not.

    Thanks !
    Amit

    Reply
  5. Gagan

    I also paid extra TDS by mistake. I emailed contactus@tdscpc.gov.in and got following response. I guess only option is to wait.

    Thanks,
    -Gagan

    ——8<——8<——-
    Dear Sir/Ma'am,

    Thank you for contacting us, it is our pleasure to assist you.

    We have taken note of your request related to the functionality of refund. The functionality is being considered. The Deductors shall be informed through the TRACES portal as soon as the functionality is implemented.

    Thanks for your cooperation.
    —-8<——–8<———

    Reply
  6. Vijay Kumar

    I am selling my property to a buyer for Rs 95 lakhs. I understand the buyer will pay Rs 95,000 as TDS and pay me net of (95 lakhs and 95,000).
    1. How will I get this 1% (i.e. Rs 95,000) back from the IT Dept?
    2. Does the Buyer have to give me Form 16 or can I take it myself from some portal like Traces or ITdept website?

    Many Thanks,
    Vijay

    Reply
  7. Kunal

    I have finalized to purchase a plot in Bangalore which is costing about Rs.17 Lakhs and my seller is not having a PAN card with her.
    Kindly suggest steps to take before i register the property.

    Your kind help with this matter will highly be appreciated. Thanks.

    Reply
  8. RAMESH GUPTA

    I ENTERED INTO AGREEMENT FOR PURCHASE OF FLAT FOR RS.50.47 LAC WHICH INCLUDE CLUB MEMBERSHIP RS. 1 LAC, POWER BACKUP RS.20000/-, LEASE RENT 111000/-, IFMS 37250/-. WHETHER THESE ARE TO BE EXCLUDED WHILE CALCULATING TDS on purchase of flat

    Reply

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