Buying a new home is a major life milestone, but it's crucial not to overlook the tax obligations. Under Section 194-IA, the buyer is primarily responsible for deducting and depositing TDS.
Who Must Deduct TDS?
TDS provisions are applicable if the total purchase consideration of the immovable property is ₹50 Lakhs or more. The buyer must deduct TDS at the rate of 1% (or more if the seller doesn't have a PAN) from the total payment made to the seller.
- Applicable to both residential and commercial immovable properties.
- Not applicable to transactions involving agricultural land in rural areas.
- The deduction must be deposited with the government within 30 days of the end of the month in which deduction was made.
Crucially, the buyer does not need a TAN (Tax Deduction Account Number) for this specific deduction; only a valid PAN is required for both parties.
Non-Compliance Consequences
Failure to deduct or deposit correct TDS can lead to monthly interest at 1% or 1.5%. Furthermore, substantial penalties may be levied by the Income Tax Department for delay in filing Form 26QB.
Need Help with Property TDS?
We assist property buyers with the entire compliance process, from initial deduction to generating the mandatory Form 16B for the seller.
Property Tax Support