TDS on Sale / Purchase of Property - Steps to Pay TDS through Challan 26QB and to Obtain Form 16B

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 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. 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 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 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 need 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.