TDS 194IA : TDS on the purchase of immovable property

When a buyer buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50 lakhs, he has to deduct tax at source (TDS) when he pays the seller.

The buyer has to deduct TDS at 1% of the total sale amount. Please note, the buyer is required to deduct TDS, not the seller
TDS is required to be deducted only if total purchase value is Rs 50 lakh or more
If the payment is made by instalments, then TDS has to be deducted on each instalment paid.
‘Consideration for immovable’ property shall include all charges like nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to the transfer of the immovable property. This is applicable for immovable property purchased on or after 1 September 2019.
TDS is to be paid on the entire purchase value.
Example:-
for TDS on Sale of Property, if you have bought a house at Rs 55lakh, you have to pay TDS on Rs 55 lakh and not on Rs 5 lakh (i.e. Rs 55 lakh – Rs 50 lakh). This is applicable even when there is more than 1 buyer or seller. Post the budget 2019 amendment to section 194-IA, in the above example, if on 1 September 2019, you have paid Rs 2 lakh towards parking fee, Rs 1 lakh for water facility fee and Rs 1 lakh for electricity fee, your sale consideration would be Rs 59 lakh (55+2+1+1). You will have to pay TDS on Rs 59 lakh @ 1%. Your TDS payable would be Rs 59,000.
Buyer of the property need not obtain a TAN (Tax Deduction Account Number) for depositing TDS with the government. You can make the payment using your PAN.
For the purpose of depositing TDS, buyer will have to obtain the PAN of the seller, else TDS must be deducted at 20%.
TDS is deducted at the time of payment (including instalment payments) to the seller
The TDS on the immovable property has to be paid using FORM 26QB within 30 days from the end of the month in which TDS was deducted.
After depositing TDS to the government, the buyer is required to furnish the TDS certificate inform 16B to the seller. This is available around 10-15 days after depositing the TDS. The buyer is required to obtain Form 16B and issues the form to the seller.

Steps to Pay TDS through Challan 26QB and to Obtain Form 16

The steps to pay TDS through challan 26QB and to obtain Form 16B (for the seller) are as follows:

e-Payment through Challan 26QB (Online)
Step 1: Log in to your account on the Income Tax e-filing portal. Select e-File > click on e-Pay Tax > click on the new payment > Form 26QB AND THEN ADD DETAILS OF THE BUYER .

Step 2: Click on ‘+ New Payment’