TDS is attracted at the time of payment of consideration.
Are you planning to buy any property in India? If yes, you must know these TDS rules.
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TDS is attracted at the time of payment of consideration.
PAN of buyer and seller is mandatory. If either of them does not have PAN, he/she can apply for the same before tax is deducted and deposited.
For example: if the deduction was made on 10th June, it needs to be deposited by 31st July.
Mr. Buyer bought a property of Rs. 70 lakhs from Mr. Seller, with below Payment Details:
1. Rs. 5L @ agreement to sell on 15th FEB
2. Rs. 25L advance on 20th March
3. Rs. 40L on 15th April upon Property Registration
1. On 15th FEB - Deduct Rs. 5,000 & pay 4.95L to Mr. Seller
2. On 20th March - Deduct Rs. 25,000 & pay 24.75L to Mr. Seller
2. On 15th April - Deduct Rs. 40,000 & pay 39.60L to Mr. Seller
1. Rs. 5,000 by 30th March
2. Rs. 25,000 by 30th April
3. Rs. 40,000 by 31st May
and
Along with this, Mr. Buyer shall file TDS return in Form 26QB for each installment (i.e. Total 3 TDS returns)
1. For Rs. 5K - by 15th April
2. For Rs. 25K - by 15th May
3. For Rs. 40K - by 15th June
Form 26QB contains all details like Name, PAN, address of buyers and sellers, address of property transferred, agreement date, total consideration agreed, installment paid and amount to be paid as TDS i.e. 1% of the installment.
Form 26QB has to be filled in by each buyer for a unique buyer-seller combination for their respective shares.
Hence, If:
a. 1 buyer and 2 sellers, 2 form 26QBs will be filled
b. 2 buyers and 2 sellers, 4 form 26QBs will be filled.
INTEREST
The buyer would be required to pay 1% interest p.m. on the amount not deducted.
In case, the TDS has been deducted but has not been paid, Interest @ 1.5% p.m. would be applicable.
PENALTY
The officer may levy up to Rs. 1 Lakh
PENALTY
Rs. 200 per day till the date of default (maximum up to the amount of TDS payable)
Ex: Where TDS of Rs. 20,000 was required to be paid & a delay of 210 days was there, penalty payable shall be 20k only & not 42k (210*200)
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