Understanding TDS on Property Transactions: A Guide for Home Buyers
- Suagam Homes
- May 10
- 3 min read
When buying a property in India, there are several legal and financial responsibilities that homebuyers must be aware of. One such important aspect is TDS on property transactions. Many first-time buyers are unfamiliar with what it means, why it is required, and how it affects the overall home-buying process.
This simple guide breaks down TDS on Property to help homebuyers understand their obligations and avoid legal complications.
What is TDS on Property?
TDS stands for Tax Deducted at Source. Under Section 194-IA of the Income Tax Act, if you are buying a property (other than agricultural land) worth ₹50 lakhs or more, you are required to deduct 1% of the sale amount as TDS and deposit it with the Income Tax Department.
This applies to:
Residential properties
Commercial properties
Land (except agricultural land)
When Should You Deduct TDS?
As a buyer, you must deduct TDS:
At the time of making the payment (full or partial) to the seller
For each installment if payment is being made in parts
The TDS amount must be deposited with the government within 30 days from the end of the month in which the payment is made.
How to Pay TDS on Property?
Here’s a step-by-step process to pay TDS:
Visit the TRACES portal (https://www.tin-nsdl.com/)
Select Form 26QB (Payment of TDS on property)
Fill in the required details:
Buyer & seller PAN
Property details
Transaction amount
Submit the form and generate the acknowledgement slip
Pay the TDS online through net banking or at a bank branch
Download Form 16B (TDS certificate) from the TRACES portal and issue it to the seller
Key Points to Remember
PAN Details Are Mandatory: Both the buyer and seller must have valid PAN numbers.
Incorrect PAN or Delay: Providing incorrect PAN or missing the deadline can lead to penalties.
Joint Buyers or Sellers: If there are multiple buyers or sellers, TDS must be deducted proportionately.
Common Questions Answered
1. Is TDS applicable if the property value is exactly ₹50 lakhs?
Yes. If the total consideration is ₹50 lakhs or more, even by ₹1, TDS is applicable.
2. What happens if the buyer fails to deduct or deposit TDS?
The buyer may face:
Penalties
Interest on late payment
Prosecution in extreme cases
3. Is TDS applicable on under-construction properties?
Yes, TDS is applicable on under-construction properties if the total payment exceeds ₹50 lakhs.
Presenting Sugam Homes – Building Trust, One Home at a Time
When planning to buy your dream home, it is important to choose a trusted real estate developer. Sugam Homes, a top real estate builder in Kolkata, is known for delivering quality homes with transparent and hassle-free buying processes.
Recognized as one of the best real estate companies in Kolkata, Sugam Homes offers:
Well-planned residential projects
Customer-first approach
Compliance with all legal formalities, including assistance on financial queries like TDS on Property
With Sugam Homes, home buying becomes a safe, smooth, and joyful journey.
Final Thought
Buying a home is a big milestone, but it also comes with legal duties. Understanding TDS on property helps ensure a smooth and law-compliant purchase. It's always wise for home buyers to stay informed and, when in doubt, consult a tax advisor to avoid penalties and future complications.
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