Paying TDS (Tax Deducted at Source) is essential when buying a property worth Rs 50 lakh or more in India. This is required by Section 194-IA of the Income Tax Act. According to this law, buyers must deduct 1% TDS from the sale price. They must then deposit this amount with the government.
This article will explain how to pay 1 TDS on property purchase online. It will include steps for joint buyers and payments to builders.
How to Pay 1 TDS on Property Purchase
Indian law requires a one percent tax withholding on any property sold for more than Rs 50 lakh. This rule applies to properties that have not been used for farming.
- When making a payment to the seller, 1% is taken off as part of the sale price.
- You must submit the subtracted funds for deposit to the Income Tax Department using Form 26QB.
- You need to show a TDS certificate (Form 16B) to the seller as proof of your deposit.
How to Pay 1 TDS on Purchase of Property
Here is a simple guide to pay the TDS when buying property:
Step 1: Go to the Income Tax Portal
- Visit the TIN-NSDL website or go directly to: https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
- Choose the Title Deed Transfer System for Property (Form 26QB).
Step 2: Fill Form 26QB
- Choose “TDS on Property (Form 26QB).”
- Please enter the Buyer or Seller information. This includes the PAN number, address, mobile phone number, and email IDs.
- Fill in the property information. Include the full address, state, and pin code.
- Please enter your sale amount and the TDS amount, which is 1% of the sale price.
- Date of Agreement or Transaction.
Step 3: Payment Mode
- Choose “Net Banking” for online payment. If not, select “Pay at Bank” to create a challan and pay offline.
Step 4: Confirmation & Receipt
- After you make a successful payment, please download a Challan 280 as proof.
- Keep a copy for your records when you file your income tax return.
How to Pay 1 TDS on Property Purchase Online
Buyers usually choose to pay TDS online. It is quicker and easier.
How to Pay 1 TDS on Property Purchase – Contact Number +91-9654852919
Here’s how to pay online:
- Please log in to the NSDL portal.
- Choose Form 26QB for TDS on Property.
- Please provide all required information. This includes your PAN number, property details, and the amount you owe.
- Select “Net Banking” for the payment method.
- Use your bank’s safe payment system to pay.
- After you pay, download and save the Challan 280 form.
How to Pay TDS on Property Purchase for Joint Buyers
When several buyers buy property together, each buyer must pay their share of TDS separately.
Example: For instance:
- Property value: ₹1 crore.
- Buyer A and Buyer B each own 50% of the shares.
- Each buyer must pay TDS on ₹50 lakh. This amounts to ₹50,000 for each buyer.
Steps for Joint Buyers:
- Both buyers need to submit their own Form 26QB applications.
- Please write down how you will share your property shares.
- Each owner must pay their share of the TDS amount.
TDS on Property Purchase from Builder
When buying property directly from a builder, the buyer must pay a one percent withholding tax on each payment.
Important Points:
- TDS applies if the total value of the property is more than Rs 50 lakh.
- Subtract one percent in Tax Deducted at Source from each payment made to a builder.
- Deposit the deducted TDS each time you make a payment.
- After you pay TDS, give Form 16B to the builder.
Even when you make partial or installment payments, TDS must be paid with each transaction.
Documents Required for Paying 1 TDS on Property Purchase
You will need some documents and details to process the payment.
- PAN of Buyer(s) and Seller(s).
- Complete property information
- sale consideration amount
- Payment details, payment date, and credit information.
- The list shows the bank accounts that are used.
Penalty for Late Payment of TDS on Property
Not paying TDS tax on time can lead to penalties.
- Interest is charged at 1% per month for late deductions.
- If no deposits are made after payroll deductions, 1.5% interest will be added each month.
- You could face a fine between Rs 10,000 and Rs 1 million for not following the rules.
TDS must be withheld and paid on time.
How to Download Form 16B (TDS Certificate)
After making TDS payments, buyers must give their seller or builder an updated TDS Certificate (Form 16B).
- Check out the TRACES portal: https://www.tdscpc.gov.in
- Register as a taxpayer with your PAN number.
- Go to “Downloads” and then click on “Form 16B (Buyer).”
- Please enter the Acknowledgment Number from Challan 280.
- Download a copy and give it to the seller.
Key Points to Remember
- TDS is applied at 1% of the sale value, not the stamp duty value.
- The buyer is responsible for taking out and paying this tax.
- Properties valued at Rs 50 lakh or more qualify.
- Your payment must be made within 30 days of the payment month.
- Keep your challans and certificates safe for future use.
📝 FAQ Section
1. What is TDS on property purchase?
TDS on property purchases is a tax taken at the source. Under Section 194-IA, buyers of properties worth Rs 50 lakh or more must hold back one percent of the sale value. They need to deposit this amount with the government.
2. Who pays 1% TDS on property purchase – buyer or seller?
Buyers must take out and deposit one percent (1% TDS) from payments to sellers. This follows the rules of the Income Tax Department.
3. Is TDS applicable if the property value is below ₹50 lakh?
No. TDS only applies if your property’s sale price is more than Rs 50 lakh. If it is not, TDS is not needed.
4. How to pay TDS on property purchase online?
Online Tax Debate Collection Services Limited (NSDL) lets users pay TDS online. To do this, fill out Form 26QB. Enter the buyer, seller, and property details. Then, make the payment using Net Banking.
5. What is the deadline for paying TDS on property purchase?
TDS must be paid within 30 days after the month in which you paid the seller.
Conclusion – How to Pay 1 TDS on Property Purchase
Learning how to pay 1 TDS on property purchase helps buyers follow tax rules and avoid fines. Whether paying online, buying together, or from a builder, following this process carefully can make the transaction smooth.
Check PAN details, payment amounts, and due dates often to avoid confusion. If needed, get help from a tax consultant or CA to file TDS on time.
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