Buyers of property have to deduct TDS from payments made to the seller. Rules about how to deduct & deposit TDS on property purchase are listed under section 194-IA of the income tax act.
Here are some other requirements –
- The buyer has to deduct TDS @ 1% of the total sale price to be paid. No TDS is deducted if sale price is less than Rs 50lakhs.
- Providing PAN of the seller is mandatory – or else TDS is deducted @ 20%. PAN of the buyer is also mandatory.
- It is not compulsory for the buyer to obtain a TAN number.
This TDS was earlier required to be deposited within 7 days from the end of the month in which it was deducted.
The income tax department has extended the time limit for depositing TDS on sale of property. Such TDS can now be deposited within 30 days from the end of the month in which it was deducted.
So if you have deducted TDS on property on 8th August 2016, you can deposit it by 30th September.
Do note that these rules apply from 1st June 2016.
Therefore, if any property payments are made before 1st June 2016, TDS will have to be deposited within 7 days from the end of the month in which it is deducted.
Want to know more about TDS on sale of property? Here’s a complete GUIDE on HOW to FILE FORM 26QB – read here.
More reading : Penalties for non-filing of Form 26QB – read here.