How does TDS deduction work in case of property sale


#1

How does TDS deduction work in case of property sale?


#2

When you sell a property the buyer is mandated by law to deduct TDS at 1% of the total value if the property is above Rs. 50 Lakhs. Your buyer needs to deposit the TDS amount with the IT department allowing you to claim a credit for the deduction.


#3

Hi,

Here are some important points regarding TDS on sale of property:

  1. Deducting TDS on sale of property is the responsibility of the buyer regardless of whether the property is financed by a Home Loan or bought from a builder.

  2. The TDS on sale of property must be deposited by the buyer with the government within 7 days from the end of the month in which the TDS is deducted

  3. While depositing the TDS, the PAN of both the buyer and the seller must be furnished

  4. Failure to deduct or deposit TDS could attract a hefty penalty

  5. At the time of payment to the seller, the TDS must be deducted

  6. Form 26QB must be used when depositing TDS with the government and any details with regards to the property transaction must be mentioned in the form

  7. TDS can be deposited online via the following link https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

  8. Following the deposit the buyer is required to issue a TDS certificate to the seller. This certificate is known as Form 16B and will be available online at the link mentioned above after 10-14 days from the date of deposit of the TDS.

Cheers,
Team BB