Who has to pay tds buyer or seller?

There are different types of income tax that we need to pay from time to time. When it comes to selling properties TDS tax needs to be paid. The Government of India imposes tax or  Tax Deduction at Source (TDS) on immovable properties. Now the important question regarding TDS is who has to pay TDS buyer or seller. 

 "Any person, being a transferee, responsible for paying to a resident transferor any sum by way of consideration, for the transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 1% of such sum as income tax thereon," states 194IA of the Income Tax Act. Therefore every buyer has to deduct tax at one percent of the sale consideration from the buyer if the price of the property is more than 50 lakhs.

The buyer has to deduct this tax from the seller and submit it to the government. Failing to pay the TDS tax both the buyer and seller will be penalized.

Since it is the responsibility of the buyer to submit the tax the buyer should remember to:

• Deduct 1% or 0.75% TDS from the sale consideration based on the date of payment.

• The buyer should have a copy of the seller's PAN card and they should also check it with the seller's original PAN card for verification.

• To pay the TDS, the buyer needs to have their PAN Card as well.

• You should carefully mention the PAN card details in the online form.

• If you need to rectify anything you need to approach the Income Tax Department.

If the worth of the property is less than 50 lakhs you don't have to pay TDS. I hope you have learned who is required to file TDS return.

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Let me tell you who should pay TDS buyer or seller. The responsibility for deducting TDS depends on the nature of the transaction. Generally, the person making the payment is responsible for deducting TDS.

Here are some common scenarios:

• The employer is responsible for deducting TDS from the salary of employees before making the payment.

• If a person is making a payment to a contractor or a professional, the person making the payment is required to deduct TDS.

• In cases where interest, rent, commission, brokerage, etc., is being paid, the person making the payment is responsible for deducting TDS.

It is important to check the TDS rules to determine the exact obligations in a particular transaction. The rates of TDS can vary depending on the nature of the payment and the status of the payee.

 If TDS is deducted, the deductor is required to deposit the deducted TDS to the government and provide a TDS certificate to the deductee. The deductee can then claim credit for the TDS while filing their income tax return.

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