TDS on ImmovableProperty

• 1. TDS on ImmovableProperty
• 2. What is TDS on property?§Applicable on purchase of an immovable property(other than rural agricultural land) w.e.f. 1st June,2013§Value worth Rs.50 lakh or more§TDS @ 1% to be deducted from the salesconsideration§Applicable only when seller is a resident (notapplicable in case where the transferor is a non-resident)
• 3. Who is responsible to deduct theTDS?§Buyer of the property would have to deduct theTDS and deposit the same within seven days fromthe end of the month in which TDS is deducted§TDS to be deposited shall be accompanied by achallan cum statement in Form No 26QB§Buyer shall furnish the TDS Certificate in Form No16B within 15 days from the date of furnishingchallan cum statement
• 4. Details required to pay TDS§ Transferee/Buyer’s PAN, Complete Name and Address§ Transferor/Seller’s PAN, Complete Name and Address§ Date of Agreement§ Complete Address of the property transferred§ Total Value of the sales consideration§ Details of Amount paid§ Date of payment to seller§ Amount of TDS to be paid
• 5. Procedure for payment of TDS§Log on to NSDL – TIN website (www.tin-nsdl.com)§Click on the option “Online form for furnishing TDSon property”§Select challan “TDS on sale of Property”§After selecting the challan you will be directed to ascreen for entering the details as discussed in theprevious slide
• 6. Procedure for payment of TDS§ After entering all the details, click on the PROCEEDbutton. The system will check the validity of the PAN.§ If PAN is available with then TIN will display thecontents you have entered alongwith the “Name”appearing in the ITD Database§ Verify the details entered by you. In case there ismistake in data entry, click on “EDIT” button to correctthe same.§ If all the details are correct, click on “SUBMIT” button.
• 7. Procedure for payment of TDS§The Buyer can make the payment of taxes onlinethrough net-banking account. On successfulpayment a challan counterfoil will be displayedcontaining CIN, payment details and Bank Nameor§By visiting any of the authorised bank branches.The Bank will make the payment and provideChallan counterfoil as acknowledgement forpayment of taxes
• 8. FAQQ - Mr A has bought a house in Ahmedabad. But he doesnot have TAN to report TDS on sale of property?A - Mr A is not required to procure TAN. Mr. A is required toquote his PAN as well as the seller’s PAN.
• 9. FAQQ- Mr X has bought a house in Surat from Mr. Y. But hedoes not have PAN of Mr Y. What can he do?A- PAN of the seller is Manadatory. But if Mr. Y does nothave PAN, TDS will be deducted at a higher rate of20% instead of 1%.
• 10. FAQQ- Mr C has bought a office in Baroda from Mr. D. Mr Chas made all the payments to Mr. D before 1st June,2013, though the agreement was executed on 7thJune, 2013. Does he need to deduct TDS?A- No, Mr C does not need to deduct TDS.
• 11. FAQQ- Mr Z has bought a plot of land from M/s XYZ Pvt Ltd, abuilder. Does he need to deduct TDS?A- Yes, Mr Z will be required to deduct TDS.
• 12. FAQQ- While depositing TDS Mr Z, the buyer has quotedwrong PAN in the Challan. What can he do?A- It is very important to ensure that the Pan of the Buyer& Seller are correctly mentioned in the challan. Thereis no online mechanism for subsequent rectification.He will have to approach Assessing Officer forrectification of error.
• 13. FAQQ- Mr. R purchased a house from Mr. S. He depositedTDS of Rs.100000/- for this transaction. At the end ofthe year, the tax liability of Mr. S comes to Rs.60000/-.How will Mr. S claim refund of the balance Rs.40000/-?A- The procedure for refund is as usual. Mr. S will claimthe balance amount of refund in his Income Tax Returnfiled at the end of the year.
• 14. FAQQ- Total tax liability of Mr. A from his business isRs.200000/-. On his property deal, he has TDS creditof Rs.50000/-. Can he claim the set off?A- Yes. The TDS credit on property can be set off againsttax liability payable on any other source of income.Hence his net tax liability comes to Rs.150000/-.
• 15. It’s a myth thatTDS IS AN EXPENSEActually it’s aPRE PAID TAXES WHICH CAN BE SET OFF AGAINSTTOTAL TAX LIABILITY
• 16. Points to Remember by Buyer§ Deduct tax @ 1% from the sale consideration§ Collect the PAN of the Seller and verify the same with theOriginal PAN card§ PAN of the seller and the buyer should be mandatorilyfurnished in the online challan§ Do not commit error in quoting the PAN or other details in theonline challan
• 17. Points to Remember by Seller§ Provide your PAN to Buyer for payment of TDS§ Collect Form 16B showing the TDS paid from the buyer§ Verify deposit of taxes deducted by the Buyer in your Form26AS Annual Tax Statement
• 18. If I encounter any error on NSDLsite while entering the online formdetails what should Ido?§ If any problem is encountered at the NSDL website whileentering details in the online form then contact the TIN CallCenter at 020 - 27218080020 - 27218080 or write to us at tininfo@nsdl.co.in(Please indicate the subject of the mail as Online Payment ofDirect Tax).