Wondering who will pay 1% TDS on sale of property. In India, the responsibility of paying the 1% Tax Deducted at Source (TDS) on the sale of the property falls on the buyer.
Who Will Pay 1% TDS on Sale of Property?
This provision is mandated under Section 194-IA of the Income Tax Act, 1961, and applies to transactions where the sale consideration of the property exceeds Rs. 50 lakh.
The buyer of the property is required to deduct 1% TDS from the total sale consideration at the time of payment to the seller. This deduction is mandatory and must be completed before the transaction is finalised.
After deducting the TDS, the buyer must deposit this amount with the government. This can be done through the official website of the Income Tax Department using Form 26QB. The payment must be made within 30 days from the end of the month in which the TDS was deducted.
Once the TDS is deposited, the buyer needs to provide a TDS certificate, Form 16B, to the seller. This certificate serves as proof of the TDS deduction and deposit.
If the seller does not provide their PAN, TDS must be deducted at a higher rate of 20%. Therefore, it is crucial for the buyer to obtain the seller’s PAN before proceeding with the transaction.
The 1% TDS rule is applicable only if the sale consideration of the property exceeds Rs. 50 lakh. If the transaction amount is below this threshold, the buyer is not required to deduct TDS.
Failure to deduct and deposit TDS as required can result in penalties and interest charges for the buyer. Therefore, it is crucial to adhere to the compliance requirements.
This provision ensures that the government can track property transactions and the associated tax liabilities. It helps in curbing tax evasion in the real estate sector. For buyers, understanding and complying with the TDS requirements is essential to avoid legal complications and penalties.
The 1% TDS on property sales exceeding Rs. 50 lakh is a significant compliance requirement in India, and the responsibility for this deduction lies with the buyer. Proper deduction, timely deposit, and issuance of the TDS certificate are crucial steps to ensure adherence to the tax laws and avoid penalties.
This is all about who will pay 1% TDS on sale of property.
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Who Will Pay 1% TDS on Sale of Property?
Ravi
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1 Answers
6 months
2024-07-12T08:26:32+00:00 2024-07-15T12:23:03+00:00Comment
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