Complete Guide to TDS Payment on Property Sale in India (Form 26QB)

For a Residential Indian Buyer

Navigating the complexities of tax payments can often feel overwhelming, especially when it comes to the TDS on property sale.

To help you through the process, we’ve created an easy-to-follow tutorial video that simplifies the steps for paying TDS (Tax Deducted at Source) on property transactions.

Whether you are a first-time buyer or someone looking for a reference, this video will guide you on filing and submitting Form 26QB.

Instructional Steps by Mahindra Lifespaces: How to File 26QB

Follow these steps to file Form 26QB and complete your TDS payment on property purchase:

Step 1: Login to the Income Tax Portal 

• Visit the income tax website 
• Enter your PAN number for which TDS has to be filled. Click Continue and on next page enter your password.

Step 2: Access the e-Pay Tax Section 

• From your dashboard, go to e-File page and select e-Pay Tax from dropdown.
• Select New Payment and choose 26QB (TDS on Sale of Property).

Step 3: Fill in Buyer Details 

• On the buyer details page, select residential status as ‘Resident’.
• If there is more than one buyer – select Yes; for a single buyer – select No.
• Click on continue.

Step 4: Enter Seller Details 

• Fill in the seller’s name, PAN, address, mobile number, and email ID.
• Keep the Aadhaar field blank.
• Verify details carefully before proceeding.

Step 5: Provide Property Details 

• On the property details page, choose the type of property as ‘Building’.
• Then enter the property address, registration date (or booking date if not registered), and agreement value along with the current payment date.

Step 6: Add Payment Details 

• In the payment details section, select the payment type as Installment.
• If you have selected Installment choose ‘No’ as an option for “Last Installment option”.
• In case you are making the final milestone payment, select lump sum and select ‘Yes’ for the Last Installment option.
• If the field: ‘whether stamp duty is higher than agreement value’ is showing mandatory, please consult your relationship manager.
• Enter the total amount paid till date towards purchased property followed by the current installment amount on which TDS needs to file upon.

2. Verify Tax Deposit Details 

   • Now in the Tax details section, verify the pre-populated amount in Section D.
   • Enter 1% of this value as the TDS amount filled.
   • Once verified, click Continue to proceed.

3. Choose Payment Mode 

   • Select your preferred bank and payment method.
   • You have now entered all the necessary details required to fill Form 26QB.
   • Please review before you proceed and then click Pay Now to complete the transaction.

4. Save Challan & Download Form 16B 

   • Don’t forget to save the TDS challan generated post payment completion.
   • Approximately in 3-7 working days, Form 16B (TDS certificate) will be available for download from the Traces website.
   • Share the certificate with your Relationship Manager or seller as proof of deduction.

Key Points to Remember:

• TDS Rate: TDS is to be deducted at 1% on consideration value for properties above ₹50 lakhs, as per Section 194IA TDS rate.
• PAN Details: Verify the seller’s PAN details.
• Deposit Timeline: Pay TDS within 30 days of payment done to seller to avoid any penalties.
• Form 16B: Share the Form 16B with the seller as proof of TDS deduction. It normally takes 3–7 working days to generate Form 16B TDS certificate after filing Form 26QB and making the payment.
• Login to the Traces website link to generate and download Form 16B 

Note: Currently, applicable TDS is 1% of the consideration value and is subject to change in accordance with the applicable income tax laws and regulations. Please re-confirm the applicable TDS rates before making payment.

Ensuring timely deduction, deposit, and filing avoids unnecessary financial burden and keeps the transaction compliant.

Special Scenarios

• For NRI Buyers:

If a Non-Resident Individual purchases property of more than ₹50 lakhs consideration value, they are liable to deduct and pay TDS on sale of immovable property. A valid PAN number is mandatory to file TDS. NRI buyers are advised to consult a Chartered Accountant if they want to purchase property without a valid PAN number.

Pro Tip:

We advise you to make TDS payment separately for each milestone. Should you choose to make a lump sum payment, please consult your Chartered Accountant.

Verify property total consideration value and follow TDS rules to avoid any penalties.

Mahindra Lifespaces customers will receive detailed TDS guide along with the mandatory details followed by each demand email intimation for your convenience.

Final Thoughts

Paying TDS on sale of immovable property is an essential step in ensuring a smooth and legally compliant transaction. With the help of Form 26QB, online payment systems, and clear documentation, the process becomes much easier to manage.

With the right information and support, buyers can complete this process without stress. At Mahindra Lifespaces, we believe that buying a home should be a joyful milestone, not a complicated one. That’s why we provide our customers with guidance at every stage ensuring your property journey remains transparent and hassle-free.

FAQs

1. What is Form 26QB?

Form 26QB is an online form used to submit TDS (Tax Deducted at Source) on the sale of immovable property. It’s required to be filled by the buyer when they are paying the TDS on the purchase of property.

2. Who needs to fill out Form 26QB?

It is the responsibility of the buyer to fill out and submit Form 26QB when purchasing an immovable property valued at ₹50 lakhs or more.

3. What is TDS and why is it required on property sales?

TDS stands for Tax Deducted at Source. On property sales valued at ₹50 lakhs or more, 1% TDS is required to be deducted by the buyer and deposited to the government.

4. How do I log in to the Income Tax Portal for TDS payment?

You can log in to the Income Tax Portal using your PAN details. If you don’t have an account, you’ll need to create one through the portal’s registration process.

5. What information is needed to fill out Form 26QB?

Form 26QB requires details of both the buyer and the seller, including PAN numbers, complete address, and details of the property being transacted.

6. Can I pay TDS online through the Income Tax Portal?

Yes, TDS on property sales can be paid online through the Income Tax Portal using various payment modes like net banking, debit card, or e-payment enabled bank.

7. What is the TDS rate for property transactions?

The TDS rate for property transactions valued at ₹50 lakhs or more is 1% of the total sale consideration.

8. What are the timelines for depositing TDS after property purchase? TDS should be deposited within 30 days from the end of the month in which the property was purchased.

9. What if I delay depositing the TDS?

Delays in depositing TDS can attract penalties, including interest on the delayed amount and potential fines.

10. How can I verify the tax details after submitting Form 26QB?

After submitting Form 26QB, you can verify the tax details using the acknowledgment number provided. This can be done through the Income Tax Portal.

11. Do both buyer and seller need PAN numbers for Form 26QB?

Yes, both the buyer and the seller need to provide their PAN numbers when filling out Form 26QB.

12. What should I do if I encounter issues while filing Form 26QB online?

If you encounter any issues while filing Form 26QB, you can contact the Income Tax helpdesk or consult with a Chartered Accountant for assistance.