How to deduct TDS on the sale of a House Property | Fusion - WeRIndia

How to deduct TDS on the sale of a House Property

How to deduct TDS on the sale of a House Property

If you are buying a property valued more than ₹50 lakhs from a resident Indian, you have to deduct TDS at the rate of 1%. Other than the sale of agricultural land, the buyer has to deduct TDS on the sale of all properties above ₹50 lakhs.

It is the responsibility of the buyer to deduct the TDS @1% and deposit it to the income tax department. So buyers must be aware of it while buying a house property.

The prescribed TDS rate applies to the house property sold by a resident Indian. But, if the seller is an NRI, the applicable TDS is 20% along with surcharge and cess. Besides, the TDS is applicable on the sale consideration irrespective of the sale value.

In this article, you will know about the things related to TDS deduction on the sale of house property from a resident Indian.

Here are some important things:

  • PAN cards of both the seller and buyer are essential to fill in Form 26QB. If the seller does not have a PAN card, then the TDS will be deducted @20% of the sale value.
  • If a buyer has not deducted the TDS, he will have to pay 1% interest per month on the amount that needs to be deducted as TDS. In some cases, if a buyer deducts TDS but does not pay it to the tax department, he needs to pay 1.5% per month as interest.
  • Not just that, the income tax department may levy a penalty of up to ₹1 lakh for the late deposit of TDS.
  • The buyer needs to file Form 26QB for the TDS deduction on the sale of the house property. If it is filed late, he has to pay a penalty of ₹200 per day till he files it. But, the maximum penalty levied in such cases should not exceed the amount of TDS.
  • If the sale of property involves more than one buyer or seller, then Form 26QB must be filled in separately for each of them.
  • Both the buyer and seller need to file an ITR in the year of the transaction. Any mistakes that occurred while filling in the details can be rectified online.

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