In this article, I will share with you how much they will charge you as TDS on property sale in India while you are buying a house.
In India, if you deal in properties and that transaction goes over ₹50 lakhs, you have to pay TDS (Tax Deducted at Source) on the sale of the property at 1% of the property value, sometimes 0.75% also, depending on the types of property.
For example, you have sold a property at ₹75 lakhs with a profit of ₹5 lakh as a capital gain. Now you have to pay TDS on that whole ₹75 lakhs, not just on your profit. So, the TDS will be for your property ₹75,000.
The percentage here may change over time. Visit the Income-tax website to know about any updates.
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The Government Will Penalize You
If something wrong happens, the government will penalize you with up to 7 years in prison or double the TDS payment as the law decides.
It’s the seller’s responsibility to manage the TDS data. He must cut the TDS before paying the whole amount. Otherwise, he will face serious problems.
But, don’t worry. You don’t have to do all of these. Hire a professional, and they shall do all the work for you with some basic fees.
Also, read: Property GST rates in India
How to Pay TDS on Property Sale Online in India
You can pay the TDS online between the 7th of the month, using the Government website. For example, if you make the transaction in March, you must pay the TDS before April 7th. Otherwise, a tax dispute will occur, and they will question you, about that.
Sometimes they will fine you for late payment. So make sure you pay it on time. Set an alarm on your calendar, and never forget to make the payment on time.
Eligibility of TDS by Property Type
You need to pay TDS on the following types of real estate:
- Single-family homes
- Multifamily homes
- Commercial buildings
- Retail showrooms
If you are dealing in any of these, and the transaction exceeds ₹50 lakhs, you have to pay the TDS on the property sale, except for the agricultural land.
Visit the government income tax website and search for the 26QB form. Fill it up with the necessary documents and pay the required tax on your property.
You can also approach a tax expert and fill out the form offline at the tax office, and then you can pay the TDS on the property. I think the online process is faster than the traditional process.
Documents Required to Fill the TDS Form
These are the documents you must submit, to get a concession on the tax, probably.
- Pan card of both parties. If not given, they will deduct TDS at a rate of 20% as they do in salary.
- If you want to make the payment via monthly installment (EMI), they will deduct the TDS every month based on your transaction.
- 16B form is required. You must send it to the seller, so they can fill it out and send you back before the form fills up.
Carefully submit all the documents. Because in online submission, they only allow a few KB of upload. Make sure you compress it to fit for the upload.
Offline, you can submit anything. There is no limit to it. But, it will take some time to process. That is a roadblock, I think.
Property TDS For Joint Property Owners?
For the joint property owner, if the transaction of a single person exceeds ₹50 lakhs, he must make the payment at 1% of the property value. Otherwise, it’s not required.
For example, you have sold a property at ₹90 lakhs in joint ownership with a 50% share each. So, your transaction value will be as an individual ₹45 lakhs. You don’t have to pay the TDS here. You had not crossed the required amount for it.
So, if you are a joint property owner, you can use these to reduce your property taxes, I mean the TDS. Some people buy properties in a joint name. Because they know how good it can do for them
Some people buy houses in their wife’s name. The law says if you buy a house in your wife’s name, you don’t have to pay tax to a certain amount which is not applicable to men. That’s why some wise men use their wife’s name in the process to save some TDS.
There are more laws on tax savings. I will create a complete article only for tax. You subscribe to our email list to get it in your inbox as soon as possible
Problems After Submitting the TDS form
While paying the TDS on property sales in India, If you face any problem or want to change some data in that form, you can send a request to the Income Tax Department. They will verify your request and may allow you to make some corrections.
But, this process is very tedious, most of the time, you shall fail to do so, and sometimes you have to pay extra to correct it. So be very careful before you submit the form.
Make sure you do it right at any cost. Otherwise, you have to pay premium fees for the correction. And maybe you will create a dispute in your reputation as a taxpayer in their eyes.
I am not a Tax Expert
I’m not a tax expert. Before doing anything, you should visit a tax professional, then make the right decision. This article is for the basic information on TDS on property sales in India. It’s up to you how you use these pieces of information. That’s all.
You must pay the TDS on property sale in India on time. Don’t try to avoid it. It will create a bigger problem for you in the long run. Hire a professional to make all things right. Submit our TDS on time at any cost.
So that is all for the TDS on property sale in India. I hope now you know how much money you have to pay, and how you can save money on it. Talk to an expert, and then make your move. Thanks for reading. See you soon.
Frequently Asked Questions (FAQ)
What is the last date to pay property TDS?
On every financial year, you must pay your property TDS before the 7th of the month.
How much money do I need to pay as TDS?
You have to pay TDS on the sale of the property at 1 percent of the property value, sometimes 0.75 percent also.
What are the documents needed to fill out the TDS form?
All the property-related documents with a copy of the pan card for both parties