Friday, May 1, 2015

TDS on Sale of Property, Delays & defaults in 26QB and payment of TDS

The Buyer of Immovable Property (Other than rural agricultural land) is required to deduct tax on the rates applicable from the sales consideration payable to RESIDENT Transferor provided the sales consideration is equal to or more than Rs.50 Lacs.
 Section 194IA would be applicable if any of the following conditions are satisfied:
1.    If the transaction of sale is occurred on or after 1st June 2013 & sales consideration is equal to or exceeding Rs. 50 Lacs.  OR
2.    If the advance consideration received before 1st June 2013 is equal to or exceeding Rs. 50 Lacs but sale agreement is made after 1st June 2013.
Tax  is to be deducted at Source at the time of payment or at the time of giving credit to transferor, whichever is earlier. So at the time of sale of property the tax can be deducted in installments or lump sum as per the date of agreement by the 7th of the subsequent month in which agreement is entered into for payment in installments or in lump sum but as per the date of payment.  If any advance payment is being made, then tax is to be deducted at the time of such payment.  If the payment is made in installments then tax is to be deducted on payment of each installment.
The Tax is deductible @ 1% of the consideration payable to resident transferor [if valid PAN is quoted]. If the seller does not provide valid PAN, then the tax is deductible @ 20%. The tax deducted is to be deposited by challan cum statement on Form 26QB. In case the property is held by joint owners, the provisions of Sec 194IA will still be applicable because the threshold limit of Rs. 50 Lacs is property-wise and not transferee-wise. Permanent Account Number (PAN) of the seller as well as buyer should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction. If the PAN of seller is not filled or wrongly filled, then TDS would be deducted @20%.
Procedure of depositing the Tax Deducted
The buyer has to fill the details of buyer and seller in Form No. 26QB.  After that, the buyer has to remit the tax deducted electronically.  On receipt of payment confirmation, a nine digit alpha numeric acknowledgement no. would be generated and such acknowledgement no. is to be kept by the buyer. On successful payment, a challan containing CIN and payment details would be generated. Print this as it will be required at the time of registration as Tax Payer. 

There are two options to make payment:
a) Online payment through net Banking 
b) E-Payment at a subsequent date

In case a) option is selected then as soon as click for first option there is window to select the name of the bank from where the payment is to be made and then account details and other details a for E-payment are required. After successful payment the receipt is generated which is further required at the time of generating Form 16B i.e TDS Certificate.

In case b) option is selected then Acknowledgement slip for TDS on sale of immovable property is generated having PAN of Buyer, PAN of Seller, 9 digit alpha numeric Acknowledgement number, Amount of TDS as well as last date of payment. Then second step in this option is to make payment which can be done by bankers on behalf of the Buyer of the property or otherwise e-payment can be made by Clicking on the given link:  

After clicking the above web page there are the following information is to be entered:
PAN of Buyer
PAN of Seller
Ack Number of Pre-generated 9 digit Alpha Numeric Acknowledgement Number
Assessment Year which is subsequent to Fin. year in which property is purchased i.e   Assessment Year is 16-17 for Financial Year 15-16

Generally payment of TDS on Purchase of property is a huge amount so Income Tax Department has given tutorials for the same.

There are E-Tutorials for TDS on Sale of Property:

E-Tutorial for making the on line payment or for subsequent payment please follow the given links respectively:
TDS on Property - e-tax payment immediately (through net banking)

TDS on Property - e-tax payment on subsequent date (through bank branches)
In case of failure to deposit the tax deducted, interest and penalty would be levied on the purchaser. Interest will be charged @ 1.5% per month or part of the month from the date of deduction to date of actual deposit.  TDS CPC has raised the demands against delays and defaults in filing 26QB. TDS CPC has sent U/S 200A and raised demands under Section 156 for defaults and Section 234E for delays @ Rs.200/- per day.
Payment of Demand raised on delays and defaults:
Now TDS CPC has given the facility to make payment of demand raised against TDS on Sale of Property has been enabled.
To Pay Such Demand raised please click on