By Rachana Kanoi
Any person responsible for paying any sum to a resident transferor by way of consideration for transfer of an immovable property (i.e., building or part of building or any land other than agricultural land) is liable to deduct tax at source under Section 194-IA.
In other words, as per this section the buyer has to pay TDS and not the seller. The tax has to be deducted at the time of payment or credit, whichever is earlier. The TDS is to be deducted @ 1% of the total sale consideration. However, TDS needs to be deducted @ 20%, if the deductee does not furnish PAN. No tax is deductible where the consideration paid or payable for the transfer of an immovable property is less than Rs 50 lakh.
Online payment of TDS can be made through challan cum statement on Form 26QB through NSDL website. Tax so deducted should be deposited to the government account through any of the authorised bank branches using the e-Tax payment option available at NSDL. TDS so deducted shall be paid within 30 days from the end of the month in which TDS was deducted.
Steps to pay tax online
Log on to NSDL-TIN website (www.tin-nsdl.com) or use the following link – https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
Under TDS on property, click on the option Form 26 QB and select 0020 if you are corporate payer and 0021 if you are a non-corporate payer. Select financial year from the dropdown for which payment is to be done; select tax applicable for which payment is to be done, mention PAN of the buyer, seller; re-enter PAN of buyer and seller; provide complete address of buyer and seller and address of property transferred.
Next, mention the date of agreement/booking of property, total value, mention if the above payment is done in lump sum or in installments. Enter the TDS rate and the TDS amount to be paid. If all the above detail including the name displayed is correct, then click on ‘Submit’ button. In case you have made a mistake in data entry, click on ‘Edit’ to correct. There are two modes of payment at the bottom of the page—e-tax payment immediately (through net banking) or e-tax payment on the subsequent date. Choose the anyone with which you want to proceed.
If you choose net banking, login to your bank account and pay online. On successful login, enter payment details at the bank site.
On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.
If you choose payment to be made later on, an online receipt with unique acknowledgment number is generated which is valid for 10 days after generation. For payment through bank, this receipt is to be taken along with the cheque to an authorised bank for payment.
TDS certificate must be issued to the deductee in Form 16B within 15 days from the due date of deposit of TDS. The deductee shall be entitled to avail credit for the entire amount of TDS deducted during the financial year in its return of income. In case the property is partly financed by bank then TDS will be required to be deducted by the transferee on the entire amount of consideration.
Source: Tax Guru