TDS on Property Purchase
From 2013-14 financial year onwards, Income Tax department of India will be taking TDS at 1% of installments being paid by buyer to builder/seller. This is valid for all flats/houses being bought of total value more than 50 lakhs.
So what is the procedure to go through this hassle?
1. Get your PAN [I assume you are buyer, as it is buyer's task to deduct TDS]
2. Get the seller details:
a. PAN
b. Name
c. Address
d. Phone.
e. Email id
3. Get flat/house address details.
4. Type of property: Whether it Residential or not.
5. Total Sale consideration: This includes parking cost, VAT, service tax (under-construction property), khata charges and electricity back up charges.
6. Date of Sale Agreement[ /Booking if no agreement signed yet]
7. Total amount paid/credited [This is the installment amount]
So after getting all the above details, what to do next?
We have to file the tax challan online using form 26QB.
And when?
Within 7 days from the end of the month in which deduction has been made.
What is the website?
a. Resident Indian: www.tin-nsdl.com
b. NRI: https://nriservices.tdscpc.gov.in/nriapp/login.xhtml
Note: Here you become an NRI as soon as you login through the proxy of your office VPN. No need of having any VISA stamp on your passport.
So login from home without any VPN, if you are a Resident Indian .
The link is named TDS on Sale of Property
Then choose the menu option : Online form for furnishing TDS on property
Choose option 21 if buying from a corporate e.g. Builder.
Fill all the details including the value of installment being paid.
Note: TDS has to be paid only on amount (installments) being paid after 1 June 2013.
Input the TDS value at 1% rate of installment. Note there is no education cess.
So it is exact 1%.
Verify the details you have input and click submit. It will give you an acknowledgement number. Note it down.
Now if you have an online banking account where you can pay income tax then next few steps will be easy and can be done from your desk.
It will automatically take you to the option for online banking. Choose your bank and pay the tax.
Download the tax challan as proof and note down:
1. Challan Number
2. TDS paid
3. Assessment year. e.g. 2014-15
No your work is not over yet. Now we need to download form 16B which needs to be forwarded to builder/seller within 7 days.
So where is it available? At TRACES website. Go to www.tdscpc.gov.in
Note: It usually takes 2 days for the challan details to be visible on TRACES website.
So wait before trying to register at TRACES.
Note: Due to security reasons you wont be able to login to the TRACES website from outside India or from any proxy outside India. [e.g. If you are working in a US MNC then it is likely that you wont be able to login from office.]
Update: For NRIs this website might work. https://nriservices.tdscpc.
Registration
Choose the option: Tax Payer even though you are deducting tax. [ Yes ]
Input using your PAN number and choose option 2 for using the above challan details.
And now the funny part when you input the amount of your TDS, dont forget 2 decimal places. e.g. If TDS deducted is Rs 1234/- then don't input that. Enter 1234.00.
Yes the two zeroes are the difference between valid and invalid input.
Check all fields and enter the random text values in human test text box [and pray] and click submit.
Now it will take you to next page to get your communication address details and mobile number and email address. Don't make any mistake, especially on mobile number and email address.
Submit the details after review.
It will send one activation code to your email and second to your phone.
[For me it took 5 hours to get the email link and SMS came immediately. {No Kidding}]
After getting the email link, click on it .It will take you to the page where it asks for the activation codes in two steps. Input them and you are registered.
Now where is Form 16B?
Login to TRACES (www.tdscpc.gov.in) and go to Downloads and choose Form 16B.
Here search for your challan.
Then click on it and say Request Download. [Its status at first will be submitted]
After one day go again to the website and choose Requested Downloads. The challan status would have changed to available.
So now you have the Form 16B.
Now what? It is password protected. [Yes]
What is the password? Your date of birth [ddmmyyyy].
Unzip and print the pdf file. Sign it and courier/handover to the seller.
......Really Easy.....
Any more queries? Ask in the comments... below.
So what is the procedure to go through this hassle?
1. Get your PAN [I assume you are buyer, as it is buyer's task to deduct TDS]
2. Get the seller details:
a. PAN
b. Name
c. Address
d. Phone.
e. Email id
3. Get flat/house address details.
4. Type of property: Whether it Residential or not.
5. Total Sale consideration: This includes parking cost, VAT, service tax (under-construction property), khata charges and electricity back up charges.
6. Date of Sale Agreement[ /Booking if no agreement signed yet]
7. Total amount paid/credited [This is the installment amount]
So after getting all the above details, what to do next?
We have to file the tax challan online using form 26QB.
And when?
Within 7 days from the end of the month in which deduction has been made.
What is the website?
a. Resident Indian: www.tin-nsdl.com
b. NRI: https://nriservices.tdscpc.gov.in/nriapp/login.xhtml
Note: Here you become an NRI as soon as you login through the proxy of your office VPN. No need of having any VISA stamp on your passport.
So login from home without any VPN, if you are a Resident Indian .
The link is named TDS on Sale of Property
Then choose the menu option : Online form for furnishing TDS on property
Choose option 21 if buying from a corporate e.g. Builder.
Fill all the details including the value of installment being paid.
Note: TDS has to be paid only on amount (installments) being paid after 1 June 2013.
Input the TDS value at 1% rate of installment. Note there is no education cess.
So it is exact 1%.
Verify the details you have input and click submit. It will give you an acknowledgement number. Note it down.
Now if you have an online banking account where you can pay income tax then next few steps will be easy and can be done from your desk.
It will automatically take you to the option for online banking. Choose your bank and pay the tax.
Download the tax challan as proof and note down:
1. Challan Number
2. TDS paid
3. Assessment year. e.g. 2014-15
No your work is not over yet. Now we need to download form 16B which needs to be forwarded to builder/seller within 7 days.
So where is it available? At TRACES website. Go to www.tdscpc.gov.in
Note: It usually takes 2 days for the challan details to be visible on TRACES website.
So wait before trying to register at TRACES.
Note: Due to security reasons you wont be able to login to the TRACES website from outside India or from any proxy outside India. [e.g. If you are working in a US MNC then it is likely that you wont be able to login from office.]
Update: For NRIs this website might work. https://nriservices.tdscpc.
Registration
Choose the option: Tax Payer even though you are deducting tax. [ Yes ]
Input using your PAN number and choose option 2 for using the above challan details.
And now the funny part when you input the amount of your TDS, dont forget 2 decimal places. e.g. If TDS deducted is Rs 1234/- then don't input that. Enter 1234.00.
Yes the two zeroes are the difference between valid and invalid input.
Check all fields and enter the random text values in human test text box [and pray] and click submit.
Now it will take you to next page to get your communication address details and mobile number and email address. Don't make any mistake, especially on mobile number and email address.
Submit the details after review.
It will send one activation code to your email and second to your phone.
[For me it took 5 hours to get the email link and SMS came immediately. {No Kidding}]
After getting the email link, click on it .It will take you to the page where it asks for the activation codes in two steps. Input them and you are registered.
Now where is Form 16B?
Login to TRACES (www.tdscpc.gov.in) and go to Downloads and choose Form 16B.
Here search for your challan.
Then click on it and say Request Download. [Its status at first will be submitted]
After one day go again to the website and choose Requested Downloads. The challan status would have changed to available.
So now you have the Form 16B.
Now what? It is password protected. [Yes]
What is the password? Your date of birth [ddmmyyyy].
Unzip and print the pdf file. Sign it and courier/handover to the seller.
......Really Easy.....
Any more queries? Ask in the comments... below.
This is so useful...Thank you so much, Pankaj. I have this link as one of my prominent bookmarks :-)
ReplyDeleteu r welcome!!
DeleteThanks for taking the time to discuss this, I feel strongly that love and read more on this topic. If possible, such as gain knowledge, would you mind updating your blog with additional information? It is very useful for me. House for sale in Clinton mo
DeleteVery helpful! Thank you so much. I only have one question though. As the bank paid on 99% and I am paying 1%, the values do not match (amount paid - 99% and tds 1%).
ReplyDeleteSo, I had to enter 100% value as amount paid and 1% as TDS though prestige actually has only got 99% payment.
What is the alternate option?
Yes you have to enter the full installment amount (100%) and not what is actually being given to builder (99%). This is the only correct way so no alternate option.
DeletePankaj, Thanks a lot for the post...
DeleteThe website does not attempt to tally. I had been entering 99% in Amount Paid/Credited* section. And 1% in TDS Amount to be paid* till now. Not very convinced why do we have to put 100%, partucularly when it does not insist.
Remember it is a government website. So 100% is entered as this is the installment amount you will pay if there were no TDS.
DeleteThink about your salary. Do employers deduct TDS and say your salary is this much only in offer letter?
Hi.... Please advice on below Queries -
ReplyDeletea) In the option of "Amount Paid/Credited - Please select Amount Paid/Credited from the list * (Mention Amount payable to the Transferor/Seller)" do i need to fill individual Installment amount details which i pay every month or need to fill sum of all installment amount paid so far ?
b) TDS amount should be 1 % of total sale value/Sum of all installment paid so far OR 1% of individual Installment ??
You need to pay TDS along with each installment being submitted to builder.
DeleteSo answers are:
a) Individual Installment
b) 1% of Individual Installment.
Forgot to download Form 26 QB. What options to get challan number?
ReplyDeleteDid you pay the challan online through your bank account? If yes, then you might get its acknowledgement too from the bank. That contains your challan number.
ReplyDeletepaid through bank online. after going to bank site does it take you back to www.tin-nsdl.com site?
ReplyDeleteNo, but your bank's customer service might guide you to download the TDS acknowledgment receipt which contains your challan number.
DeleteWas able to download chalan from bank website. Thank you for your help Pankaj. One more question? Should we send the TDS reciept within 7 days? If not what is the consequence?
ReplyDeleteTDS has to be paid within 7 days. You can send it within 1-2 months maximum. It depends upon the builder or they will add it to next months Demand Letter.
DeleteThank you Pankaj
ReplyDeleteI made the online payment for e challan and probably used wrong head to put my TDs amount. Form 16B generated now show 0 TDS. How can I correct the same. ?
ReplyDeleteIts like getting a tax refund for TDS paid on your salary. So it might be difficult to get it back soon. You can call TRACES helpline but it might not be worth the money paid for TDS. There is no fixed solution that I am aware of either. It is better to pay the TDS again and chase the tax department thereafter.
DeleteThanks Pankaj for the detailed explaniation. One query though
ReplyDeleteI paid the amount to builder last year in December and I am paying the TDS amount now. What Financial year do I need to enter in form 26 QB. Last year's financial year 2014-15 or this year's financial year 2015-16?
I have booked my flat on 2013 and since April 2013 every alternative month we are paying installment to a builder.
ReplyDeleteNow its 2016 how we can calculate the fine?
The fine will be a combination of Late Filling Fee plus interest on delayed TDS. The late filling fee is Rs 200 per day but cannot exceed the original TDS amount.
ReplyDeleteBesides that interest is usually calculated at 1% per month of TDS amount.
So if TDS amount is Rs 1000/- then for most of your installments Late fee becomes Rs 1000/- too. In addition to that interest for a delay of 36 months for first installment the interest will be 36% of Rs 1000 = Rs 360/-. Similarly calculate the values for next installments and add them all to start the payment process using Form 26QB online correction.
Hi Pankaj, Thanks a ton for the information posted here. Can I pay TDS (and interest + penalty) for multiple installments together or do i need to pay one in every transaction?
DeleteHi Pankaj,
ReplyDeleteThanks a lot for the information. I need your help on the following questions:
1. Do I need to pay TDS for under construction property? My house is due in 2017.
2. Do I need to pay 1% of total sale value? If my flat agreement was done for 60L, 60000 is the TDS? Or just the part I loaned from the bank? I had made 20% down payment for the property, so TDS would be 48000?
3. If so, can I pre-pay the TDS for the complete EMI tenure?
1. Yes you need to pay TDS each time you pay an installment to the seller (builder).
Delete2. TDS = 1% of installment (in case of single buyer)
3. I have not heard of that option although it is a nuisance to pay with each installment. So you have to pay TDS before 7th of next month in which installment has been paid.
I have booked a flat in joint name with my wife. Do i need to deposit TDS by filling 26QB twice for every transaction or can i just pay 1% TDS by filling it in name of 1st buyer? I see no field which would allow them to total up two form 26QB for a particular property for the given month payment.
ReplyDeleteWhat I have heard, is that you can pay the whole amount using one 26QB for you and another for your wife. Input 0.5% as TDS rate instead of 1%. So the total will add upto 1% for two buyers. You can confirm again from others.
ReplyDeleteI have made one (under construction commercial property)installment payment on 29th Aug 2016, and then did 26QB on 1st Sep 2016. While filling the 26QB form, I have mentioned "Date of Payment: 29th Aug 2016" and "Date of Tax Deduction : 1st Sep 2016". Today I got a intimation letter for late fee for 2 days (410). I am not sure, what I did wrong.
ReplyDeleteIt seems to be wrong. They have only relaxed the time between installment payment and tax deduction. The IT dept should rectify this error.
DeleteSo what I should do?
DeleteSince late fee is only for 2 days, you can pay it and then contact IT customer service online or go to their office to get it rectified. It looks like software issue.
DeleteThis comment has been removed by the author.
ReplyDeleteHi Pankaj, What if the seller is an NRI, do I need to deduct the same 1% TDS from him or should I deduct 20%? example if the purchase price is 1 cr, then should I be deducting 20 lakhs from seller for TDS??
ReplyDeleteFor NRI seller the TDS rates are not that simple. If NRI sold the property after holding it for 3 years then yes TDS rate will be 20%. But it is also impacted by Double Tax avoidance treaty with his country. So you can ask the NRI what rate to use. That will be more specific to your case.
DeleteI have paid two installment in one year, and filed two 26QB, will both TDS deduction will be shown in Form 16B?
ReplyDeleteYou will have to request for Form 16B twice at Traces website giving challan details of each 26QB separately. Then each TDS deduction will be visible in two Form 16B.
DeleteSeems like IT dept is now claiming interest even for one day of delay between paying builder and submitting form 26QB. [Interest on late payment default has been calculated from the date of deduction till the date of deposit of tax]
ReplyDeleteNice post.Thanks for sharing.
ReplyDeletewhat is tds
i have received regular statement for ack u/200 A ,for short deduction amount of 0.08/-. there is interest on late deduction 215/- and final amount payable is 220/ as they have rounded of the amount by adding 4.92/-.
ReplyDeletemy query is how to enter the amount in Demand link, as there are decimals.
They are not bothered about anything except the final amount you pay. So put Rs 1 and rest in interest or fine. As long as you pay you should be ok.
Delete