TDS on Property Purchase - Form 26QB (Hindi) - YouTube

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If you buy/sell a property & let's say its value is more than 50 lakh

So, TDS(Tax Deducted at Source) is applicable to that

That means, the buyer has to deduct TDS from the seller's payment and pay it to the government

If you don't do so, then the sub-registrar won't register your property, you can be charged plenty

And you can get a notice from Income Tax department

The requirements for TDS is different for NRI & Resident Indian

This means, if the seller is a resident Indian then the requirement for TDS is different from that of NRI

So, in this video, we will know about the process of TDS, so watch the video till the last

Let's move to the blackboard

What is the treatment of TDS, if the seller of any property is a resident Indian

If the purchase price is less than Rs.50 lakhs then no TDS

If the purchase price is more than Rs.50 lakhs, then there will be responsibilities for the buyer

1. Deduct 1% TDS from each instalment or one time in lumpsum, paid to the seller

For example

If the property is worth 1 crore & you pay lumpsum then you will deduct 1 lakh TDS from it

If you pay it in 4 instalments

So, you will deduct TDS1 from the 1st instalment, TDS2 from the 2nd, TDS3 from the 3rd & TDS4 from the 4th

Let's say, if you have done 25lakhs payment 4 times then you will deduct 25k each time

How to pay this TDS to the government?

So till when does it has to be deposited?

In whatever month you deducted the TDS, let's say in July you deducted these 4 instalments

Or you pay lump sum in July

Then you can submit the TDS by 30th August

If you have done any TDS deduction on 15 July

Whenever you are deducting

Let's say, you have done 2 payments in June & 2 payments in July

Then the TDS of payment done in June has to be deposited till 30 July

And the TDS of payments done in July has to be done till 30 August

If you have done a TDS deduction of lumpsum on 15 July, then you have to deposit the TDS till 30 August

We will see, how it is deposited?

Form 26 QB, to deposit TDS online

When you generate the form 26 QB, then you can deposit it through the bank or through online

I will show you, how to generate it & what are the details required

What are the details required?

PAN & Address of Seller & Buyer

Property Details & Purchase price

Payment Details (Details whether done in instalments/lumpsum)

Applicable on all properties (Residential, commercial, industrial, etc.) except Agricultural Land

When we deposit the TDS

Ideally, buyer should deposit TDS from their own account

It is not necessary, there is no law that you have to deposit it from your own account

But it can increase complications for you if you pay it from any third party account

That is, you have to transfer money to them then they have to show it in their books & show it to income tax

So, to avoid these complications buyers should deposit TDS through their own account

So, this is when, the seller is a Resident Indian

Now talk about when the seller is NRI

In that case, how is TDS treated

TDS which has to deduct does not depend on the purchase price, whether is more than 50 lakh or less

Have to deduct TDS in every case

TSD deduct on capital gains, not on the purchasing pricing

What are the Capital gains

It is selling price by the seller-cost price to the seller (profit of seller)

Then you get capital gains

The purchase price that you subtracts from the selling price

Apart from this, you subtract some expenses which bear by a seller in selling the property

Roughly speaking, if a seller purchase this property at 50 lakh

And by chance he sells it for, let's say for 1cr, his capital gains is

1Cr-50L=50L

His capital gains are 50L, here we did not include expense, suppose

If he had 2-3L expenses on sell he can also subtract that

But, If we take approx. figure its capital gains consider is 50L

In that case, how TDS will be calculated

In that two cases arises

If a property is sold after two years

Then it comes in long-term capital gains

I will make a detailed video on capital gains

Here we will only understand broadly, how TDS is exactly levied

If a property is sold after two years, then it comes in long-term capital gains

You have to deduct TDS @ 20.6%

On the Capital Gains

Not on the purchase price

Here notice that 20.6 on capital gains, we are talking about Sale price-purchase price, 20.6% of this 50L

If the property is sold within two years

Here what is 2 year mean

The holding period of property is under 2 years from the date of purchasing

Then TDS is applicable according to his income tax slab

Then NRI will be paid short-term capital gain if the property is sold in less than 2 years, it is short-term capital gains

In that case, whatever be the income tax slab of the NRI, TDS will deduct according to that

And all this information is given by the seller to you

What was its purchase price, what slab rate of the IT

All this information you get from the seller, whoever NRI seller

Second thing you have to keep in mind is that you will also have to take TAN

The buyer has a requirement to take TAN here if buy property from NRI

And form 27Q is required in that case, as we have seen 27Q in a resident Indian case, form 27Q is generated in this case

Form 27Q is generated in this case

Then you will be able to deposit TDS online

So these are some important things related to the NRI seller

Now we see some other important points related to TDS

Buyer has to give proof to the seller of the TDS deposit

Whatever TDS you deposit, you have to give proof to the seller that deducts TDS is Deposited

You have to give Form 16B in resident indian case

And have to give form 16A in the case of NRI

If you default, by chance you did not deposit the TDS or even did not deduct the TDS, in that case, what happens

First thing, sub-registrar did not register your property, the sub-registrar also has all the income tax circulars.

And

The Finance Ministry has clearly said that

Any property whose TDS has not been paid, if it is above 50 lakhs, then it will not be registered

If by chance you did not deduct the TDS then how much penalty, Income tax dept. will impose on you

You have to pay interest of 1% p.m in penalty

By chance, you deducts TDS but do not deposit it to the govt.

Then you have to pay interest of 1.5% p.m.

Along with this, the Income Tax Officer can also impose a penalty on you up to one lakh rupees.

So these are a salient feature of TDS on property purchase

Now I quickly show you how Form 26Q can be generated

Sorry Form 26QB

To generate form 26QB, you go to Google and type pay TDS online enter and see

See this first result comes, you have the OLTAS TIN, we click on that

Tax Information Network This is basically the official website of the Income Tax Department

It is here, you are getting the option, click pay tax online, go to this, see this, all the options come out to you,

Different types of TDS, so here you will see TDS on sale of property, here you find option of form 26QB, you click it

You need to fill up all the information Firstly you need to select income tax in individual case.

Then select financial year assessment year will occurs ,

Then select the transaction of the financial year, it will take TDS on property automatically

If you have purchased a property from resident then select resident, or with NRI

Here PAN details of the buyer and the seller, After this it will automatically gives details of the buyer,

And here details of the seller will comes,

Here details of the buyer will come such as contact number, E mail ID

Similarly details of the seller will comes here,

Here property details will comes such as address, date of agreement on the date of sale execute,

Total value of consideration will come here, If you have purchased property in crore then 1 crore value will come.

Here type of payment will come such as lump sum or in instalment,

If you have payment in lump sum then the details of 1 crore will come here,

If you are paying TDs of instalment then here details of instalment will come,

Here tax deposit details will come,

Here total amount to be paid will comes, if the value is 1 crore then details to be filled up,

Here the rate of TDS should be 1 % if in case of NRI per cent of TDS to be filled,

If the TDS amount is 1 crore with 1 % then it will 1 lakh to be filled,

If you are not paying TDS on time then the late penalty fees to be paid here,

The total amount of the TDS or late fees or interest to be mentioned here,

In this way you have to fill the details,

Here is two option first is E tax payment immediately for the instant online payment,

If you did not have online bank account to make payment,

Then by clicking here you can generate the form for depositing it in any branch

Here date of payment will come to the seller with date of tax deduction,

You can proceed after entering captcha, then form 26 QB will generate,

You can store or print it in PDF form,

This is the actual 26 QB form in transaction was made on 25 May,

In this way the acknowledgement number will generate, from this you can download from 26 QB in future,

You need to save the form 26 QB

So here are the details of the buyer and the seller,

Here complete address of property and transferee of buyer and seller,

Here date of agreement and payment will come

Here the total amount given of 1 crore with TDS of 1 lakh is mentioned,

In this way you can get form 26 QB after this form 16 you can download with the following process,

On the google there is a web site named traces login,

Clicking on the first result two options will occurs, if you are a tax deductor or if you have a company,

Then you can log in by filling up the tan, or you can registered as a new user,

If you did not have tan or individual tax payer then you can select the second option,

If you have already registered then you can log in with your E mail ID, or you can registered as a new user,

Select as a tax payer then proceed,

Here you have to fill your details, such as PAN details, DOB, name and surname,

After that select option 3 according to form 26 QB to fill the details,

Here acknowledgement number to be filled which was generated during form 26 QB,

Here PAN of buyer Id and the other details,

Here you can make your own ID by checking it is available or not,

Here PAN of the seller to be filled and captcha, after that you can proceed,

You can log in, I will show you as I already have a TAN

I will log in it as a deductor and we will the download options,

So in this way you can log in traces

In the downloads option you can have the form 16 B if you are resident Indian,

Or of form 16 A as an example,

I have not made any buying and selling but whenever you make you will get an option with the Acknowledgement number you can download form 16B,

This is how the TDS and the property purchase works.

I hope you may have learned about The TDS process.

I have tried to cover all the major points, but if any point is missing then you can tell me in the comment section,

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