TDS on Sale of Property: Your Ultimate Tax Guide!
Tax Deducted at Source (TDS) is a system of tax collection in India where the payer of certain types of income deducts a certain percentage of tax at the source of payment and deposits it with the government. TDS is applicable on a variety of incomes, including the sale of property.
When is TDS deductible on sale of property?
TDS is deductible on sale of property if the following conditions are satisfied:
- The sale consideration is Rs. 50 lakh or more.
- The seller of the property is a resident of India.
- The buyer of the property is a person or business entity who is required to deduct TDS.
This means that if you are selling your property for Rs. 50 lakh or more and the buyer is a resident of India, the buyer is required to deduct TDS from the sale consideration and deposit it with the government.
Who is responsible for deducting TDS on sale of property?
The buyer of the property is responsible for deducting TDS from the sale consideration.
What is the rate of TDS on sale of property?
The rate of TDS on sale of property is 1% of the sale consideration.
How to deduct TDS on sale of property?
To deduct TDS on sale of property, the buyer must:
- Collect the PAN of the seller.
- Deduct TDS from the sale consideration at the time of payment.
- Deposit the TDS with the government within 30 days from the end of the month in which the TDS was deducted.
- Issue Form 16B to the seller within 15 days from the end of the month in which the TDS was deposited.
What to do if the seller of the property does not have a PAN?
If the seller of the property does not have a PAN, the buyer must deduct TDS at 20% of the sale consideration.
Exemptions from TDS on sale of property
The following transactions are exempt from TDS on sale of property:
- Sale of agricultural land.
- Sale of property to a close relative.
- Sale of property to the government.
- Sale of property to a public charitable trust.
Conclusion
TDS on sale of property is a way for the government to collect tax from property sellers. It is important for buyers to be aware of their TDS obligations and to comply with them.
Here are some additional tips for buyers and sellers of property in India:
- For buyers:
- Make sure to collect the PAN of the seller before making any payments.
- Deduct TDS from the sale consideration at the time of payment and deposit it with the government within 30 days.
- Issue Form 16B to the seller within 15 days from the end of the month in which the TDS was deposited.
- For sellers:
- Make sure to provide your PAN to the buyer.
- If you do not have a PAN, the buyer will deduct TDS at a higher rate.
- If you are eligible for any exemptions from TDS, be sure to provide the necessary documentation to the buyer.
By following these tips, both buyers and sellers of property in India can help to ensure that the TDS process is smooth and efficient.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
