TDS is applicable on sale of property. As per the Union Budget 2013 TDS is to be deducted on sale of property when the consideration exceeds Rs. 50,00,000. This provision is applicable to all the transaction being entered into from 1st June 2013.
The TDS has to be paid on the entire amount and not only on the amount exceeding Rs 50 Lakhs.
For example :- If the sale consideration is 51 Lakhs TDS has to be calculated and deducted on 51 Lakhs and not on 1 Lakh (51,00,000-50,00,000)
If the consideration is paid in installments the TDS has to be deducted proportionately. This is applicable even if the buyer are more than 1.
The union budget 2019 has proposed to enhance the definition of consideration for immovable property and include the following terms
- Nature of club
- Membership fee
- Advance Fee or any other charges of similar nature which are incidental to transfer of the movable property.
This is applicable for immovable property purchased on or after 1 September 2019.
Post the budget 2019 amendment to section 194-IA, the TDS would be calculated on net sale consideration as follows
| Particulars | Amount Rs. |
|---|---|
| Consideration for the Property | 52,00,000 |
| Renewal fee | 6,00,00 |
| Parking Fee | 2,00,000 |
| Other related Expenses | 2,00,000 |
| Total Sale Consideration | 60,00,000 |
| TDS @ 1% of Sales Consideration | 60,000 |
The TDS on immovable property has to be paid using Form 26QB within 30 days from the end of the month in which TDS was deducted.
• After depositing TDS to the government, the buyer is required to furnish the TDS certificate in form 16B to the seller.
• The buyer is required to obtain Form 16B from TRACES portal and issue the same to the seller.
Summary of TDS on sale
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