Under
The Income Tax Act, 1961, a few key rules regarding the sale and purchase of
immovable property have been laid out. Such transactions are covered under
Section 194-IA. The buyer of the property, also known as the deductor, is required
to deduct TDS from the consideration payable to the property seller.
If Seller/Deductee is a resident
of India:
- The Finance Act 2013 introduced
section 194IA applicable w.e.f. 01.06.2013, wherein TDS is applicable on the sale
of immovable property where the sale consideration of the property is equal to
or exceeds Rs. 50,00,000/- (Rupees Fifty Lakh). TDS @ 1% should be deducted by
the purchaser/buyer of the property at the time of making payment of sale
consideration. The tax so deducted should be deposited to the central government
account through any of the authorized bank branches. However, provisions of
section 203A will not be applicable in the above case.
- All details regarding the
transaction related to TDS on Property are required to be furnished
in Form 26QB and this Form 26QB is required to be submitted at the
time of payment.
- After depositing the TDS, the
buyer/Deductor of the property would also be required to issue Form
16B to the Seller of the property in respect of the TDS deducted and
deposited in the central government account.
If Seller/Deductee is a Non-Resident:
- TDS is required to be deducted as
per provisions of section 195 of the Income Tax Act, 1961
- All details regarding the
transactions related to TDS on Property are required to be furnished
in Form 27Q statement as 'Long/Short Term Capital Gain'. For 27Q,
Buyer/Deductor needs to apply for TAN
- After depositing the TDS, the
Buyer/Deductor of the property would also be required to issue Form
16A to the Seller of the property in respect of the TDS deducted and
deposited in the central government account.
Procedure for Payment of TDS
demand on sale of Property
Many times people make mistakes in calculating tax u/s 194IA or make any default in payment and filing of Form 26QB. At that time TDS CPC will issue you the notice asking for payment against that notice. The steps to pay the demand are as below:
Step1) Payment of demand
raised against TDS on sale of the property has to be paid through this link and
select the “Demand Payment for TDS on property” option.
Step 2) Please fill in all four
mandatory fields and the text shown in the image and then click on the “submit
“button.
Step 3) The below-mentioned
screen will appear by clicking on the “Submit” button.
Follow these Steps for
demand payment:
- The communication reference
No. as reflected in your intimation letter is mandatory to be filled.
- The demand for Short deduction (S.No.
1 of intimation letter) is to be filled in the Principal Tax row.
- Sum total of Demands of all
Interests (S.No. 2(a), 3(a), and 3(b) of intimation letter) is to be filled in
the ‘Interest’ row.
- Any penalty levied is to be
filled in the “Penalty” row
- Late filing fee u/s 234E (S.No.
4(a) of intimation letter) is to be filled in the Fee row.
- The system will automatically
calculate the total of all rows. It should be noted that the total amount in
both the columns i.e” Demand as per intimation” and” Demand being
paid” should be exactly the same, otherwise the system will not allow the buyer/deductor to proceed further.
- After filling in all the necessary
details click on the “Proceed” button for e-payment of the demand.
Step 4) The below-mentioned
screen will be displayed. Click on the “Submit to the bank for e-payment” tab
for the successful e-payment of your demand.
Created & Posted by Pooja
Income Tax Expert at TAXAJ
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