Tds on property

Dear GargV,

Tds is to be deducted while purchasing immovable property if the purchase value exceeds Rs. 50 lakhs.

TDS at the rate of 1% to be deducted at the time of each instalment paid. otherwise, late payment interest at the rate of 1.5% to be paid 

After remitting the tds in form 26QB, the buyer has to give form 16b to the seller

Thanks

CA Gokul Raj

 

 

 

Sec 194-IA deals with TDS on sale of immovable property. Under this section TDS is to be deducted @ 1% at the time of credit of such sum to the account of the transferor or at the time of payment of such sum whichever is earlier on sale of immovable property.

The transferor or the seller contemplated in this section should be a resident of India. Therefore, this section only deals with sale of property by residents and TDS @ 1% is to be deducted on such sale by resident seller provided the consideration for sale of property exceeds Rs. 50 lacs.

Tax will be deducted at the time of making payment of installment or the whole of purchase consideration as the case may be. If any advance payment is done for the purchase of property, tax should be deducted at the time of advance payment.

For example, if you are going to make payment of a installment of Rs. 10,00,000 on 25th March’2015, tax of Rs. 10,000 shall be deducted the same day ie. 25th March’2015 and you should pay the seller Rs. 9,90,000 (net of TDS).

Time limit for payment of Tax u/s 194IA to the Govt. Account

Tax deducted(TDS) from payments made to seller shall be deposited to the goverment treasury within 7 days from the end of the month of deduction.

For example: if Rs. 10,000 tax was deducted on 25th April 2014, same shall be deposited with the government account till 7th May 2014.

How to deposit tax:

Tax shall be deposited to the government treasury by filling a challan cum statement Form 26QB online, availble at TIN-NSDL website. Payment of TDS on purchase of property is to be made online by availing any one of the following options:

• online using your net banking account or
• by filling the Form 26QB and selecting the option e-tax payment on subsequent date. Now you should take the print out of the acknowledge slip, and visit any of the authorized banks for payment of TDS. Bank will make the e-payment of tax and provide you the challan of tax payment.

Make sure to fill challan cum statement in Form 26QB correctly as till now there is no possibile way to rectify any error/mistake online. You will be required to contact the assessing officer or CPC-TDS for any subsequent rectification.

Facility for verification of status of TDS deposit is also available at online services of TIN-nsdl.

One of my client has booked flat in april 2014. Value 65 lakhs..at that time he had paid advance of rs 8 lakhs but he had'nt deduct tds on that amount unknowingly and paid full amt to builder...and now he wants to clear this issue and pay tds on that amount...property is still underconstruction... and agreement also pending.... My question is whether he has to paid tds with interest.? And any penelty would be levied?

If you have paid amounts in installment , I will suggest you to deduct all TDS in last installment remaining and make sure that while filing return you pay two types of interest- 1: late payment interest 2: late deduction interest If you show it as late deduction you will have to pay interest @ 1 % p.m. and if you show it as late payment, interest is @ 1.5% p.m.

Very useful info. Thanx

As per Section 194IA, TDS is to be deducted if payment made of Rs 50L or more as against purchase of property.

TDS is to be deducted on each payment instead of deducting at final payment.

in last month, cenvat (input excise) on purchase is higher than excise sale. and service tax on sale is higher than service tax on purchase. now I was trying to adjust service tax payable with excise duty refundable. but in computation in tally erp. 9, after doing adjustment, it was showing same computation before adjustment. plz guide me with correction that how to do adjustment entry in tally erp. 9. I am waiting for your reply...

Thanks chakradharji

Thanks chakradharji

I have deducted the TDS @ 1% on 18/02/2016 and got challan number also. But i am not able to register on traces website. Also my 26AS form is not showing TDS.

Pls guide urgently.

Thanks

GargV

Thank you very much for your reply.
Please tell me where shall I show this transaction amount in IT return.
Is the tds deducted by me of seller will be reflected in my return or not.
Pls clarify.