{"id":919,"date":"2021-01-05T09:54:37","date_gmt":"2021-01-05T09:54:37","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=919"},"modified":"2021-01-05T09:54:40","modified_gmt":"2021-01-05T09:54:40","slug":"tds-on-sale-of-immovable-property","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/","title":{"rendered":"TDS On Sale Of Immovable Property: Concept &#038; Process To File"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The term Property denotes a\ncapital asset that includes flats, buildings, and even a plot of land. Further,\nthe main reason for the investors to invest in property is to make a profit by\nselling the same at a higher rate. Further, an immovable property attracts real\nestate returns, as a result, transactions including purchase and sale of\nImmovable Property is quite common these days. However, it shall be considerate\nto note that buying and selling of property include various Tax Implications.\nIn this blog, we will discuss the concept and procedure to file TDS on Sale of\nImmovable Property.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a4dad6b1fd74\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a4dad6b1fd74\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Concept_of_TDS_on_Sale_of_Immovable_Property\" title=\"Concept of TDS on Sale of Immovable\nProperty\">Concept of TDS on Sale of Immovable\nProperty<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Governing_Section_for_TDS_Deduction_on_Property\" title=\"Governing Section for TDS Deduction\non Property\">Governing Section for TDS Deduction\non Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Reason_for_Introducing_TDS_on_Sale_of_Immovable_Property\" title=\"Reason for Introducing TDS on Sale\nof Immovable Property\">Reason for Introducing TDS on Sale\nof Immovable Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Rules_for_TDS_Deduction_on_Immovable_Property\" title=\"Rules for TDS Deduction on\nImmovable Property\">Rules for TDS Deduction on\nImmovable Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Calculation_of_TDS_on_Sale_of_Immovable_Property\" title=\"Calculation of TDS on Sale of\nImmovable Property\">Calculation of TDS on Sale of\nImmovable Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Procedure_For_Filing_TDS_on_Sale_of_Immovable_Property\" title=\"Procedure For Filing TDS on Sale of\nImmovable Property\">Procedure For Filing TDS on Sale of\nImmovable Property<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Fill_in_Form_26QB\" title=\"Fill in Form 26QB\">Fill in Form 26QB<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Fill_in_Form_16B\" title=\"Fill in Form 16B\">Fill in Form 16B<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Penalty_For_Non_Compliance_With_TDS_Provisions\" title=\"Penalty For Non Compliance With TDS\nProvisions\">Penalty For Non Compliance With TDS\nProvisions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#In_case_TDS_has_not_been_Deducted\" title=\"In case TDS has not been Deducted\">In case TDS has not been Deducted<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#In_case_TDS_has_not_been_Remitted\" title=\"In case TDS has not been Remitted\">In case TDS has not been Remitted<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/blog\/tds-on-sale-of-immovable-property\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_TDS_on_Sale_of_Immovable_Property\"><\/span>Concept of TDS on Sale of Immovable\nProperty<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Finance Bill of the year 2013 has\nproposed that the purchaser of immovable property, other than rural\nagricultural land, worth Rs 50 lakhs or more is needed to pay a withholding tax\nat the rate of 1 percent from the consideration or amount payable to a resident\ntransferor.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Governing_Section_for_TDS_Deduction_on_Property\"><\/span>Governing Section for TDS Deduction\non Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 194A of the Income Tax Act 1961\ndeals with the provisions concerning TDS on sale of Immovable Property, or we\ncan say TDS Deduction on Property.<\/p>\n\n\n\n<p>However, in the case where the seller is\nan NRI (Non Resident of India), then, in that case, instead of section 194 A,\nsection 195 of the Income Tax Act 1961 will prevail.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reason_for_Introducing_TDS_on_Sale_of_Immovable_Property\"><\/span>Reason for Introducing TDS on Sale\nof Immovable Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The main reason behind the\nimplementation of the concept of TDS on Sale of Immovable Property are as\nfollows: <\/p>\n\n\n\n<ol><li>To\nBring back the Black Marketing Amount, and;<\/li><li>To\nReduce the cases of Corruption in the Real Estate Sector;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rules_for_TDS_Deduction_on_Immovable_Property\"><\/span>Rules for TDS Deduction on\nImmovable Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The rules for TDS Deduction on Immovable\nProperty are as follows:<\/p>\n\n\n\n<ol><li>The property in question must be immovable property, such as land, building, or a part of land or building;<\/li><li>TDS does not apply to agricultural land;<\/li><li>In\u00a0 the case where the seller is an NRI (Non Resident of India), then, in that case, instead of section 194 A, section 195 of the Income Tax Act 1961 will prevail;<\/li><li>In the case where the provisions of section 194 LA, i.e., TDS on the Payment of Compensation on the Acquisition of Certain Immovable Property, is applicable, then, in that case, the provisions of section 194 LA will not apply;<\/li><li>The value of the property in question must be at least Rs 50 lakhs;<\/li><li>The provisions of TDS will apply to the consideration paid by the buyer for buying the property;<\/li><li>TDS will be applicable at the rate of 1 percent of the total consideration;<\/li><li>Only the buyer has the right to deduct TDS on the purchase of an immovable property. That means the seller does not have any authority to deduct TDS;<\/li><li>TAN or Tax Deduction Account Number is not needed for deducting TDS on Sale of Immovable Property;<\/li><li>Buyer can use his\/her PAN or Permanent Account Number for deducting TDS from the sale consideration;<\/li><li>Buyer needs to submit the TDS deducted to the Government;<\/li><li>In case the payment of the property purchase is made in instalments, then, in that case, the TDS levied will be deducted on each instalment paid;<\/li><li>Usually, the PAN of the seller is required as well for deducting TDS, however, in case the seller is not having PAN, then, in that case, TDS charged will be at 20%;<\/li><li>Buyer can deduct TDS either at the time of making the actual payment or at the time of credit, whichever is earlier;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculation_of_TDS_on_Sale_of_Immovable_Property\"><\/span>Calculation of TDS on Sale of\nImmovable Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Suppose A buys a property worth Rs 48 lakhs from Mr. Raj on 25.09.2019. Further, A has paid Rs 2 lakhs as a fee for annual membership of club of the residential complex, Rs 1 lakh as water charge, and Rs 1.5 lakh as the parking fee.<\/p>\n\n\n\n<table width=\"100%\">\n<tbody>\n<tr>\n<td width=\"19%\">\n<p><strong>Case Scenario<\/strong><\/p>\n<\/td>\n<td width=\"58%\">\n<p><strong>Explanation<\/strong><\/p>\n<\/td>\n<td width=\"22%\">\n<p><strong>TDS deductible<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"19%\">\n<p>Case 1<\/p>\n<\/td>\n<td width=\"58%\">\n<p>Since the property is bought after 01.09.2019, the fees payable for buying the said property will be added to the total property value to reach at the sale consideration. Therefore, the consideration would become: Rs 48 lakhs + Rs 2 lakhs + Rs 1 lakh + Rs 1.5 lakhs = Rs 52.5 lakhs<\/p>\n<\/td>\n<td width=\"22%\">\n<p>1 percent on Rs 52.5 lakhs<br \/> = RS 52500<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"19%\">\n<p>Case 2<\/p>\n<\/td>\n<td width=\"58%\">\n<p>If the PAN (Permanent Account Number) card of the seller is not accessible, then, in that case, TDS would be deducted at 20 percent<\/p>\n<\/td>\n<td width=\"22%\">\n<p>20 percent of Rs 52.5 lakhs<br \/> = Rs 10.5 lakhs<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_For_Filing_TDS_on_Sale_of_Immovable_Property\"><\/span>Procedure For Filing TDS on Sale of\nImmovable Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The steps involved in the process for filing\nTDS on Sale of Immovable Property are as follows:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fill_in_Form_26QB\"><\/span>Fill in Form 26QB<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The step involved in filing the form\n26QB are as follows:<\/p>\n\n\n\n<ol><li>Login to the official portal of <strong>NSDL<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.tin-nsdl.com\/\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>;<\/li><li>Now click on the second option from the menu bar \u201cServices\u201d;<\/li><li>After that, choose \u201cTDS on Sale of Property\u201d;<\/li><li>Now, select the applicable challan Form 26 QB for the payment of TDS on sale of property;<\/li><li>In the next step, the applicant needs to fill in the asked details, such as Tax Applicable, Financial Year, Status of the Seller\/ Payee\/ Transferor, other details, and the amount of tax paid;<\/li><li>Now, click on the option \u201cProceed\u201d;<\/li><li>Thereafter, it is advised that the applicant must check the details filed;<\/li><li>In the next step, an acknowledgment number will be displayed on the screen, together with two options, i.e., \u201cPrint form 26 QB\u201d and \u201cSubmit to Bank\u201d;<\/li><li>The applicant requires to choose the option \u201cPrint Form 26 QB\u201d to take the print out of the form;<\/li><li>After that, select the option \u201cSubmit to Bank\u201d for making online fee payment by way of internet banking;<\/li><li>If in case the buyer does not wish to deposit the TDS by way of internet banking, he\/she may take the print out of Form 26 QB and furnish the same, together with the payment at respective bank branch;<\/li><li>Once the applicant has made the payment, a challan counterfoil is displayed, including CIN no. and other payment details. It shall be pertinent to note that this counterfoil acts as the proof of payment;<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fill_in_Form_16B\"><\/span>Fill in Form 16B<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The step involved in filing the form 16sB\nare as follows:<\/p>\n\n\n\n<ol><li>Firstly, Log in to the official <strong>TRACES portal<sup><a href=\"www.tdscpc.gov.in\" class=\"text-primary\"><strong><em>[1]<\/em><\/strong><\/a><\/sup><\/strong>; <\/li><li>Now, register as a taxpayer;<\/li><li>In the next step, the applicant needs to select Form 16B for the buyer, located under the download menu;<\/li><li>Thereafter, enter the transaction details concerning which form 16B is required;<\/li><li>The applicant also requires to provide other details, such as Assessment Year, PAN of the seller, Acknowledgement No, etc.;<\/li><li>Now, click on Proceed;<\/li><li>Thereafter, it is advised that the applicant must check the details filed and confirm;<\/li><li>In the next step, a download request page will be shown on the screen containing the Request number;<\/li><li>Now, the applicant needs to click on the option \u201cRequested Downloads\u201d to download the files for which the request has been raised;<\/li><li>In this step, the applicant needs to search for the request number, which was generated at the time of raising the request, and choose it;<\/li><li>Lastly, click on the option \u201cHTTP Download\u201d to download the file;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalty_For_Non_Compliance_With_TDS_Provisions\"><\/span>Penalty For Non Compliance With TDS\nProvisions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The penalty for non-compliance with TDS\nProvisions are as follows:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_case_TDS_has_not_been_Deducted\"><\/span>In case TDS has not been Deducted<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If in case the buyer has not deducted\nthe TDS (Tax Deducted at Source) from the sale consideration, then, in that\ncase, the interest will be calculated at 1 percent per month;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_case_TDS_has_not_been_Remitted\"><\/span>In case TDS has not been Remitted<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1.5 percent per month for a period,\nstarting from the date on which the TDS is deducted to the actual date of\npayment;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per the Finance Act 2013, TDS (Tax\nDeducted at Source) will be applicable on the transfer of immovable property,\nin which the consideration of the property surpasses or is equal to Rs 50\nLakhs. Further, for all transactions with effect from 01.06.2013, the buyer of\nthe property needs to deduct TDS @ 1 percent of the total sale consideration.\nThe same will be done at the time of making payment.<\/p>\n\n\n\n<p>In case of any other doubt or dilemma, reach out to <strong><a href=\"https:\/\/swaritadvisors.com\/contact-us\" class=\"text-primary\">Swarit Advisors<\/a><\/strong>, our dedicated and inclined experts are always there to cater to all your needs and requirements.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The term Property denotes a capital asset that includes flats, buildings, and even a plot of land. Further, the main reason for the investors to invest in property is to make a profit by selling the same at a higher rate. Further, an immovable property attracts real estate returns, as a result, transactions including purchase [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":921,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[83],"tags":[146],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/919"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=919"}],"version-history":[{"count":4,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/919\/revisions"}],"predecessor-version":[{"id":925,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/919\/revisions\/925"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/921"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}