Purchasing a new home means several other expenses apart from your home loan EMI: stamp duty, maintenance fees, and registration costs. But did you know that your property transaction is also subject to taxation? 

All real estate properties come under ‘immovable properties.’ Whenever there is a transfer of ownership of immovable property, except agricultural land, the buyer must pay TDS (tax deducted at source), as per Section 194-IA. Further, this rule is applicable only if the cost of the property is more than Rs. 50 lakhs. 

As the buyer, it is your responsibility to deduct TDS and make the payment to the Income Tax Department. Read this article to learn how you can pay the TDS on property online from the comfort of your home. 

How much TDS do you have to pay? 

According to Section 194-IA: 

  • The tax rate for property purchase is 1% of the total sale amount if you provide your Permanent Account Number (PAN). 
  • If you do not provide your PAN, then the rate of TDS shall be 20% of the sale amount. 
  • No tax is applicable if the property sale is less than Rs. 50 lakhs.

These TDS rules are applicable all over India, unlike stamp duty charges that can change depending on your location. Use a stamp duty calculator to estimate your stamp duty and ease your home buying process. 

Additional Read –How to Deduct TDS on Home Loan in India?

How to pay TDS on property online?

You can pay TDS for property purchases online via the NSDL website. Fill out the challan-cum-statement on Form 26QB, and pay online through the E-Tax payment gateway on the NSDL website.

Here is the step-by-step process: 

  1. Access the NSDL portal.
  2. Scroll down and click on: TDS on Property (Form 26QB).
  3. In Form 26QB, you will notice a ‘Tax Application’ section. If you’re representing a company, choose 0020 for this step. But, if you’re an individual, select 0021.
  4. Enter the PAN and the address of the buyer and the seller.
  5. Write the complete address of the property in question. 
  6. Enter all the property details like property value, date of the agreement, method of payment, TDS rate applicable and TDS amount.
  7. After this, you can proceed to the e-tax payment section and pay the TDS via net banking.
  8. After the payment confirmation, the portal will generate a challan for you. Save it on your device as proof of payment.

Things to consider

  • If you don’t pay online and select the option to pay later, you must pay the TDS within 30 days from the end of the current month. 
  • You must issue Form 16B to the seller within 15 days of depositing TDS.
  • Non-deduction of TDS attracts 1% interest on the amount not deducted for TDS. Any delay in payment attracts a penalty of Rs. 200 per day. 

Additional Read – Your Detailed Guide for Buying a House in Top Indian Cities

In conclusion

As a buyer, it is your responsibility to make timely payments for all your home buying expenses. So, pay TDS and stamp duty timely, and plan your repayment using a home loan EMI calculator to make the entire purchase process convenient.

Need a housing loan? Tata Capital offers you affordable home loan interest rates and easy repayment options.Visit our website to know more. 

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