LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Regarding tax on buying property

Rajiv Gupta (manager) (61 Points)

14 May 2019

Hi Team,
Me and my wife are planning to purchase property with value > 50L . The property is in joint name of Sellers. Now i have few queries regarding 1% TDS deduction
a) If we pay 1Lakh as token amount to the seller, will TDS deduction and submission period starts from that day itself or from the day of full and final paytment at registry time?
b) Do we (me and wife) need to apply for TAN for tax deduction and submission?
c) Do we need to submit tax challans in 4 components or proportions as both buyer and sellers are joint owners/buyers.
d) Can we start the process of TDS submission post completion of registry and sale deed?

Regards,

Rajiv

Reply
Follow
Share

2 Replies

Neha Pahuja (127 Points)
Replied 14 May 2019

The buyer has to deduct TDS at 1% of the total sale consideration. Note that the buyeris required to deduct TDS, not the seller.

No TDS is deducted if sale consideration is less than Rs 50lakhs. If installments are being paid TDS has to be deducted on each installment.

Tax is to be paid on the entire sale amount. For example, if you have bought a house at Rs 55lakh, you have to pay tax on Rs 55lakh and not on Rs 5lakh (i.e. Rs 55lakh – Rs 50lakh). This is applicable even when there is more than 1 buyer or seller.

If you are the buyer, you do not need to obtain a TAN (Tax Deduction Account Number) number.

If you are the seller, you have to provide your PAN or else TDS is deducted at 20%. PAN of the buyer is also mandatory. TDS is deducted at the time of payment or at the time of giving credit to the seller, whichever is earlier.

This TDS has to be deposited along with Form 26QB within 30 days from the end of the month in which TDS was deducted.

After depositing TDS to the government, the buyer is required to furnish the TDS certificate to the seller. This is available around 10-15 days after depositing the TDS.

The buyer is required to obtain Form 16B and issues this TDS certificate – Form-16B to seller.