What is TDS on immovable property?

The Finance Bill 2013 has proposed that purchaser of an immovable property (other than rural agricultural land) worth INR 50 lakh or more is required to pay withholding tax at the rate of 1% in form 26QB from the consideration payable to a resident transferor.

Whenever there is a transaction of any sum for the purpose of transfer of ownership of an immovable property like a building, a part of a building or land other than agricultural land, then the buyer in the said transaction is liable to pay Tax Deducted at Source according to Section 194-IA. In simple words, when someone buys a property from a seller, then they’re liable to pay a tax on it if the cost of the property is more than Rs. 50 lakh.

What is form 26QB?

• Form 26QB is a form to make an online payment of TDS from the e-tax payment option.
• Form 26QB is required to be filed by the buyer online.
• PAN of the buyer and seller, details of the property, total consideration payable, and payment details must be furnished in the said form.

The Due Date for Payment of TDS on form 26Q:

• The due date of payment of TDS on transfer of immovable property is 30 days from end of the month in which the deduction is made.

Late filing fees for late TDS Payment for purchase of immovable property:

• In case of default of non-filing or late filing of Form 26QB, a penal fee is applicable under section 234E of the income tax act.
• Rs. 200 has to be paid for every day during which such failure continues.
• The buyer would also be liable for defaults of late Deduction, late payment, and interest thereon.

Suggested read: TDS rate chart for the FY 2020-21

Penalty on non-payment of TDS on immovable property:

• Assessing Officer may levy penalty under section 271H at his discretion.
• This section is applicable when a statement as required by the tax laws is not submitted timely.
• The penalty under this section must be more than Rs 10,000 and can extend to Rs 1lakh.
• However, if TDS is deposited with fee & interest and the statement is submitted within 1 year of the time prescribed, no penalty shall be levied.

Important notes for Form 26QB filing:

• The tax rate for property purchase is 1% of the total sale amount if the purchaser furnishes his and the seller’s Permanent Account Number (PAN).
• However, if the purchaser does not furnish their PAN, then the rate of TDS shall be 20% of the sale amount.
• If the purchase was made between the 14th of May 2020 to 31st of March 2020 then the TDS Payment shall be made at the rate of 0.75%.
• No tax is applicable if the property sale is less than INR 50 lakh.

Why choose Ebizfilling as your service provider for making your TDS Payment online on the purchase of immovable property?

EbizFiling.com is an eminent business platform and a progressive concept. It helps in the end-to-end incorporation, compliance, advisory, and management consultancy services to clients in India and abroad. The process of Private Limited Company incorporation & registration is easy, cheap and quick at EbizFiling.com. EbizFiling.com also provides services such as Income tax Return filing, TDS return filing, GST return filing. Ebizfiling also provides Partnership Registration, HUF, LLP Incorporation and One Person Company registration and Secretarial Compliance Services. You may get in touch with our compliance manager on 09643203209 or email info@ebizfiling.com for free consultation.