As mentioned under Section 194-IA of the Income Tax Act, from 1st June 2013 onwards, any individual purchasing an immovable property valued more than Rs.5 0 lakh will be liable for TDS (Tax Deducted at Source) while paying the seller. This was introduced through the Finance Act of 2013-14. Immovable property under TDS on property may include both a building and a plot. A tax deduction of 1% is applicable when the buyer makes the payment of the property to the seller.
Agricultural land is exempted from the purview of TDS on sale of property. Other than that, the tax so deducted on property purchase has to be deposited to the government through authorised banks. A buyer has to fill up the details of form 26QB before proceeding with the TDS payment.
Steps to Fill Form 26QB & Pay TDS on Property Online
Form 26QB or Challan 26QB can be filled in the following manner –
Step 1- Visit the NSDL-TIN website and click on the option ‘TDS on sale of property.’
Step 2- Click on the online form mentioning TDS on property. Once you click the option, an e-payment form will open.
Step 3- In the form, click the option Form 26QB.
Step 4- Read the instructions displayed on the form before filling up the details.
Step 5- From ‘Tax Applicable’ tab, select 021 in case you are purchasing the property for yourself and 020 in case you are purchasing it on behalf of a company or organisation.
Step 6- Fill in the box of the financial year. The assessment year gets filled automatically. The assessment year is a year ahead of the financial year. For example, if you are paying the tax in March 2019, the fiscal year running is 2018-19, and the assessment year will be 2019-20.
Step 7- Enter the details of the buyer and seller of the property.
Step 8- Enter the address where the property is situated, along with all relevant transaction details (including the date of the agreement, payment type, total value of consideration, etc.)
As specified under Section 234E of the Income Tax Act, a buyer has to pay a late fee if he/she fails to fill in the challan in Form 26QB within 7 days from the month-end in which the tax deduction is made.
You can choose any of the 2 payment modes displayed at the bottom of the page. A buyer can either pay offline by generating an online receipt form or visit one of the authorised banks and pay via cheque. To pay TDS on property online, you can opt for an online payment mode such as net banking.
Here are the steps to make e-payment of TDS on purchase of property –
- Enter the details of the bank name, date of payment, etc.
- Type the captcha code correctly and click the ‘Proceed’ button.
- Verify all the details and press the ‘Confirm’ button.
- Save the Acknowledgement number after successfully paying the tax.
Apart from TDS, there are other factors too that you need to keep in mind before purchasing a property. For instance, if an individual has availed a loan against property, he/she can also avail tax benefits on it. If you go into the details of a property loan, you can understand the mechanisms in detail. Both salaried and self-employed individuals can look for ways to avail tax benefits on a loan against property.
NBFCs provides pre-approved offers on loans. These offers helps customers experience a smooth and hassle-free loan-availing procedure. Pre-approved offers are available on a varied range of financial products including home loans, personal loans, business loans, etc. To check your pre-approved offers online, all you have to do is fill in your name and contact number.
If you are planning to buy a new property, you need to study a lot about TDS on property as well as the important points about a loan against property such as LTV offered, prepayment charges, etc. Such detailed info is essential to make a better financial decision while purchasing a new plot, house, or any other property.
