How to file TDS on sale of property?

As I mentioned earlier, a buyer of any immovable property, including a house, apartment, building, or land (except from agricultural land), is required by section 194-IA to deduct Tax Deducted at Source (TDS) from the money they pay the seller of the property. But how to file TDS on sale of property? Here is the process.

• Visit the TRACES portal or the designated TIN‑NSDL portal.

• Access the Form 26QB return section. 

• Fill in details such as buyer’s and seller’s PAN, property address, clause for transactions over Rs 50 lakh, transaction date, and the amount paid or credited.

• The portal automatically calculates 1% TDS liability. Complete the challan and pay via net banking or NEFT. 

• After payment, download Form 16B, which includes seller and property details, as proof of deduction, and share it with the seller.

Alternatively follow the steps I shared earlier. 

For buyers who neglect to deduct or pay this TDS on time, there are substantial consequences. They may owe the deducted tax to the government along with interest under Sections 201(1A) and 201(1C), and face penal charges for non-compliance. This is how to file TDS for property.

Taxes play a significant role in the sale of real estate in India. The Tax Deducted at Source (TDS) on property sales under Section 194-IA is one example of such a tax. Here, "property" refers to immovable property, such as buildings and land. Within 30 days following the end of the month in which TDS will be withheld, you must file TDS using Form 26QB. But, do you know how to file TDS on sale of property? You can file it from the official e-filing portal. I have shared the process below for you.

Get Free Estimate

Steps to File TDS on Sale of the Property

Here’s a step-by-step guide to file TDS on sale of property. 

1. Go to

   https://www.incometax.gov.in/iec/foportal/

   . 

2. On the homepage, click on e-Pay tax (you can get it under e-file).

3. Tap on “New Payment.”

4. Choose Proceed under Form 26QB (Payment of TDS on Property Transactions).

5. Provide details of the buyer and seller, including PAN, address, and contact information. Ensure PAN details are correct to avoid rejection or penalties.

6. Mention the property details, including address and transaction value. Specify the payment mode (lump sum or installment) and calculate the TDS amount (1% of the transaction value).

7. Make the payment to generate a challan with a 14-digit acknowledgment number.

8. Save the acknowledgement for future reference. 

After following the above process, you can register on the TRACES portal to download and provide Form 16B (TDS Certificate) to the seller. I hope you found this helpful.

Get Assistance with Tax Assessment and File TDS on Sale of Property from Experts at NoBroker

Read more

How to Claim Refund on Sale of Property in ITR 

When you acquire a property (a house or an individual apartment in a housing building) for more than Rs. 50 lakhs, you are supposed to reduce a certain proportion of tax from your payment to the owner by law. Sections 206AB and 206CCA were added to the Union Budget for 2021. It says that if a taxpayer seems to have a TDS of 50,000 or more within the last two years without submitting a taxable income, the TDS rate would be doubled or 5%. Individuals with yearly revenue of more than 10 crores must deduct a TDS of 0.1 percent on transactions above 50 lakhs, according to Section 194Q.

If you sell private land (other than farmland, a property, or a portion of a building) for more than Rs. 50 lakhs, the buyer must reduce tax at source. Section 194-IA of the IT Act, 1961, covers TDS (tax deducted at source) on property sales. While the buyer is responsible to calculate and pay income tax when purchasing the property, the buyer is also responsible to calculate and pay income tax while purchasing the property. The need for TDS reduction through the buyer at the time of sale is covered by Section 194IA.

The following steps will help you on how to file 26QB form online.

1) Go to

and log in. 

2) Click the continue button on the page -TDS on property (Form 26QB).

3) If you're a business customer, use code 0020, and if you're a non-business customer, use code 0021. Details like payment type, financial year and assessment year will be filled automatically.

4) Fill in all the details like PAN, address, amount of the property and tax amount.

5) After this, you will see the payment page at the end of the page. There are two payment options like instant e-tax payment (with net banking) and e-tax payment on a later date (tax e-payment through branches of a bank).

6) You can pay the amount online with net banking and print or save challan 280 with a mark of 800.

7) If you are unable to process payments online, you will receive an online receipt for Form 26QB with a specific Acknowledgement Number, which is valid for 10 days. Take that receipt to any bank with a cheque and the bank will process your online transaction and create a challan for you.

This process helps you with how to file TDS on sale of property and how to file 26qb form online.

Read more: