TDS on Sale of Property in India

As per Finance Bill of 2013, TDS is applicable on sale of immoveable property where the sale consideration is equal or more than Rs 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 mentions that for all transactions from June 1, 2013, tax @ 1% would be deducted by the purchaser of the property while making the payment of sale consideration to the seller. This tax deducted has to be deposited to the Government Account through any of the authorized bank branches as per the list provided.

Pointers for the Purchaser

1. Collect the Permanent Account Number (PAN) of the Seller and verify the same with the Original PAN card
2. Deduct tax @ 1% from the total sale consideration
3. PAN of both seller and purchaser has to be mandatorily furnished in the online form with other information regarding the sale.

Any errors can be rectified online, and the Income Tax Department will have to be contacted as per the Income Tax Act, the deductor of TDS has to mandatorily provide the TDS Certificate with the required details. Form 16/16A are issued furnishing details of TDS transactions between deductor and deductee, PAN details etc

1.      Form 16 is for salary income, issued annually

2.      Form 16A is for all income other than salary, issued quarterly

Non-issuance of TDS Return Filing after the deduction attracts penalty of Rs. 100 per certificate per day

TDS certificates are generated by the deductor from TRACES (TDS Reconciliation Analysis and Correction Enabling System), which can be digitally signed. Certificates are required by the taxpayer while claiming a credit or refund, if any.