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Basic requirement for deducting TDS on sale of property


We have written two articles about buying property in the open market

[1. Buying property from NRI and consequence of Non Deduction of Tax

2. 7 things you must know about Income Tax before buying property from Non Resident Indian (NRI)]


One of the recent issues of sale of property is TDS (Tax Deducted at Source) if the registered value of the property is over Rs.50 Lakhs. We have also written a detailed article about  TDS on sale of immovable property u/s 194IA. In this article, we are writing about the basics.


  1. Permanent Account Number (PAN) – Both seller and buyer mandatorily need to have a PAN. So, before selling or buying a property ensure that you have a PAN Card.


  1. Net Banking Facility – TDS u/s 194iA necessarily is to be paid using internet banking. So, before selling or buying, activate your net banking facility. You can also use the net banking facility of your friends or relatives. But we suggest you to make TDS from the buyers account. Visit https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp to make the payment. The process is self-explanatory and you can do it yourself. However, those who find it difficult may take the help of tax professionals or chartered accountants.


  1. Mention about TDS in sale deed – TDS is part of the sale consideration. So, one has to mention about it in the sale deed. Kindly cross check this aspect before registering the property


  1. Print TDS Challan – Form 26QB is the Challan to be used for making TDS payment. After making the payment, take a printout of the same and carry it with you to the Sub-Registrar office at the time of registration. Sub-Registrar is obliged to verify proof of TDS payment.


  1. Generate TDS certificate – The buyer of the property is obliged to issue Form 16B (TDS Certificate) to the seller. To generate this Form, the buyer has to register in Income Tax TRACES website (https://www.tdscpc.gov.in/). While registering give the correct email id and mobile number. Again here, the process is a bit cumbersome, but if you exercise patience and read things carefully, you can generate the form without any difficulty. You can also use the services of a tax professional if you find the process complicated.  Please note that Form 16B can be generated after 10 days of making the payment.


Thought for the day

Have patience. Everything is difficult before it is easy

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About CA Prasad Chartered Accountant

CA Prasad Chartered Accountant
CA Prasad is a practicing Chartered Accountant and partner in Bangalore -based CA Firm. For further information or query, please email it to [email protected]