TDS on purchase of property more than 50 lakhs

If property of value more than 50 lakhs is purchased by joint owners(spouse), whether tds provision is appicable to both the buyers if share is 50% each but entire payment is made by only one owner. Kindly guide

Replies (8)
Quick Summary
This discussion clarifies the rules for Tax Deducted at Source (TDS) when purchasing property valued over £50 lakh. It confirms that TDS provisions apply to both single and joint buyers, regardless of how the payment is split. While initially there was some confusion, it's now established that a buyer can use their PAN card to file Form 26QB for TDS deposit, rather than needing a separate TAN, which simplifies the process for all parties involved.

@ Manjiri Juvekar

This query was already answered by me few weeks ago. Again summarizing below.

For Property transaction over 50 Lakh [whether sale amount or market value, whichever is higher] , 1% TDS for Resident Seller and 20% TDS + 4%Cess on 20% TDS will have to be debited by the buyer.

This is irrespective of whether it is a SINGLE BUYER or Joint Buyers.

Buyer [or Buyers] will need to deposit the TDS to Income Tax Authrities after getting TAN, within a period of maximum 3 M from Date of Registration of Property using challan QB. Joint buyers would require individual TANs and deposit the TDS with separate QB.

And Buyer [ or Buyers] would have to obtain the Form16A from TRACES and provide the same to the Seller at the earliest as soon as it becomes available. For Joint Buyers, there would be more than one Form 16A.

Form 16A would be needed while doing the IT Return Filing.

In case the full payment is made by a single buyer, but property is registered in Joint names, the TDS will need to be deducted by the buyer making the payment with TAN, TDS deposit under QB, Form16A, all would be under name of the individual making the payment.

Hope it is clear.

Thanks Rajan for detailed reply.

Just as per my knowledge for deduction of TDS under Section 194-IA and filing of Form 26QB, the buyer is not required to apply for a TAN. The transaction can be completed using the PAN of the buyer.

Thank you again!!!

@ Manjiri Juvekar

The TAN is necessary for the buyer for generating Form16A.

And that would be required by the seller for filing ITR and declaring capital gain.

 

https://www.caclubindia.com/guide/form-26qb/

 

https://incometaxindia.gov.in/pages/tds-sale-of-immovable-property.aspx

 

https://kmgcollp.com/tds-on-sale-of-immovable-property-section-194ia/

@ Dhirajlal Rambhia

Dhirajlal Ji namaskar.

Information provided through the above links cleared the misconception about need for a TAN.

2 years ago, my friend [property buyer] was advised that he would have to get a TAN [ could take 3 months] to deposit the TDS under 26QB.

So I was having the same impression.

Have the rules about compulsory TAN [for depositing TDS with 26QB] changed in last 2 years ?

TDS deducted u/s. 194 IA by property purchaser can file Form 26QB with PAN. No need of TAN, the rule is from the beginning, not changed after that. 

@ Dhirajlal Rambhia

Many thanks. 

You are welcome.               

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