How to make payment of TDS on the Sale of Immovable Property

1% TDS for Resident Seller

The purchaser of an immovable property (whether built up or under construction) of value INR 50 lakh or more has the responsibility under the Income-Tax Act, 1961, to pay a withholding tax of 1% from the sale consideration payable to the seller of the property. This withholding tax must be deducted by the purchaser and deposited in the government’s account.

No need to pay withholding tax in case of the sale value of the property is less than INR 50 lakh.

The Due date for payment of withholding tax

The due date of payment of TDS on the transfer of immovable property is 30 days from the end of the month in which the deduction is made.

Prerequisites

PAN of the buyer and the seller is mandatory to make an e-payment of TDS on the sale of the property. The TAN (Tax Deduction Account Number) is not required to make this payment. TAN is required in case of Non-Resident.

TDS Payment

TDS payment can be made by the buyer online to the Income Tax Department.

​Form 26QB to be filled

To make an online payment of tax from the e-tax payment option, the buyer is required to fill out an online form, 26QB. PAN of the buyer and seller, details of the property, total consideration payable, and payment details, mobile number, email id and residential address of both the party must be furnished.

TDS Payment by Buyer

TDS needs to be paid on the amount paid/payable to the seller. The buyer can make the payment using the e-tax payment option. The tax payment can be made on the net banking portal or by visiting authorized bank branches. Once the payment is made, an acknowledgement number is generated. On entering the acknowledgment details at a later date, one can generate the submitted Form 26QB for records.

Form 16B

Once tax payment is made, Form 16B (TDS certificate to be issued by the buyer to the seller) can be downloaded from the website of the Centralised Processing Cell of TDS (CPC-TDS) at www.tdscpc.gov.in

Key Points

• If the property transaction has more than one party as a buyer or seller, Form 26QB needs to be filled by each buyer for a unique buyer-seller combination.
• The seller must verify the deposit of taxes deducted by the Purchaser in Form 26AS Annual Tax Statement.

The buyer must 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 rectification, you will have to contact the income tax department.