In today’s world, people buy and sell various properties in India with respect to taxes. In the same way, TDS is a system introduced by the Indian government. It is termed “Tax Deducted at Source”, which is 1% applied when you purchase immovable land or property that is worth fifty lakhs. This kind of tax comes under India’s Income Tax Act. Let’s dive in deeper to understand how to pay 1% TDS on property purchase, keep reading the content below.
The one percent is deducted from the buyer and deposited to the government on behalf of the one who pays the tax. In fact, the major purpose of TDS is to reduce evasion of tax, share the tax payment responsibility, and make sure there are regular tax payments without dues.
How to Pay 1% TDS for Property Purchase in 2025
The steps listed below must be taken to make sure that the TDS deal goes smoothly.
- Step 1: Sign up on the website for “e-filing.” To find an e-file, it takes you to the e-filing site.
- Step 2: Click on “e-file,” which will take you to the “e-pay tax” page where you can start a new payment. To find the 26QB form, click on the 26QB tab.
- Step 3: Fill out the 26QB form with information about the buyer. Sometimes, the site will do this for you. To proceed with the processing, click Continue.
- Step 4: Make sure you fill out the seller’s PAN properly. Make sure to check again after you enter.
- Step 5: In the “property details,” you’ll need to fill in the home address, sale information, property type, deal date, and other information. With the information you give, the tax that is taken out at the source of the payment will be figured immediately.
- Step 6: Go to the payment page and make sure you fill out and click on the correct billing choice. To make a successful payment, select your preferred transaction method. After this is done, you can save the ticket by downloading it. It is critical to keep track of your transactions.
You have to use the e-filing website to pay the TDS and fill out a 26QB form that is only for property deals. To pay TDS, you need to show proof of selling value, buyer PAN, property, and more.
The application process will help you choose the best way to pay through net banking. Once the payment goes through, you can download the proof form to keep track of it. In order to pay TDS on the purchase of a property, the above information must be gathered.
When is TDS Applicable on Property Purchase?
Knowing how to pay 1% TDS for property is a legal process initiated by the Indian Income Tax Act. Generally, the application of TDS occurs when the property purchase exceeds fifty lakhs. There is only one percentage of TDS for 50 lakhs, but when it exceeds the TDS increases. In fact, agricultural land doesn’t come under this category, which is an exemption from paying tax. The TDS is applied to the following sections.
- No sale PAN or Buyer PAN: If the seller and buyer don’t have PAN, they must be deducted twenty percent of tax.
- Property Type: The property must be commercial or residential land because TDS is applicable only for immovable property. This doesn’t include agricultural or farming lands.
- Value of Transaction: TDS is only applicable when the value of the immovable property is fifty lakhs or above.
Benefits of Paying TDS Online
- Easy Record Maintenance: Online payments are easy to manage because they instantly generate and allow you to download a receipt. The likelihood of missing a paper challan is high. In fact, it also has high automatic tracking, which has payment history and present records for future reference.
- Accuracy and Automated Forms: The online TDS application is auto-filled. which reduces manual errors. To add on, there are automated verification and validation checks for buyer and seller PAN. Here’s how the technology has grown to maintain accuracy and verification in online forms.
- Quick Processing: The manual filling process is more time-consuming, while the online TDS application offers real-time acknowledgement and faster form processing. Indeed, the funds are transacted faster, which reduces any lapses. Therefore, an online TDS application provides instant and real-time proof of the payment transaction.
- Convenience : The online TDS payment transaction is available 24/7, which you will not get with an offline application. The digital TDS payment expands its access and so it is the best choice for beginners. Therefore, without visiting banks or government offices, you can access online TDS payment right from your place.
Key Points on Online Payment of 1% TDS on Property in India
- TDS property Online application: As tax withdrawn at source comes under the Income Tax Act to be filled out, the tax is implemented if the property value exceeds. The buyer takes the charge and duty of deducting and depositing tax deducted at the source.
- Online Documents Requirements: The property details and proofs are necessary to submit an online TDS payment. The PAN details of both sellers and buyers are essential for TDS. If the documents are missing, then the deduction percentage will be increased.
- Fill the 26QB Online form: Submitting only one form is enough for both buyer and seller collaborations. This form is instructed to be filled out within thirty days from the date of tax payment.
- TDS Online certificate: The 16B form certificate is what the buyers must download from the portal for record maintenance. It is important to register on the TRACES portal as per instruction after the TDS online payment.
Conclusion
Under Section 194-IA, the Income Tax Act has rolled out TDS on the purchase of unyielding property. Both the buyer and seller must undergo these processes to apply for the TDS online. The whole procedure is streamlined online for simple accessibility and convenience.
When the buyer fails to submit any important documents, the TDS increases or decreases. Moreover, the buyer and seller will both receive the TDS receipt and certificate online for future reference. Are you still doubting how to pay TDS on purchased property? Never mind; here is your quick solution: pay TDS online through an e-filing portal. Pave the way for timely withdrawals on TDS and enhance your property purchase to run smoothly with legal compliance.
To pay TDS (Tax Deducted at Source) on property purchase, the buyer must deduct 1% TDS on the sale amount if the property value exceeds ₹50 lakh. Here’s the process:
TDS Deduction: Deduct 1% of the total sale amount as TDS at the time of payment to the seller.
Payment to the Government: Pay the TDS amount to the government using Challan 280 under section 194-IA. You can do this online via the Income Tax Department’s e-payment portal.
Form 26QB: After paying the TDS, fill out and submit Form 26QB online. This form is a declaration of the TDS deduction on the property sale.
TDS Certificate (Form 16B): After the payment, the buyer can download the TDS certificate (Form 16B) from the TRACES website.
Ensure the payment is made within the specified timelines to avoid penalties.
Visit the Income Tax Portal
Go to https://www.incometax.gov.in/iec/foportal/.
Navigate to e-Pay Tax
Under the ‘e-File’ menu, select ‘e-Pay Tax’.
Select Form 26QB
Click on ‘Proceed’ under ‘26QB (TDS on Sale of Property)’.
Fill in the Details
Enter the buyer’s and seller’s PAN, property details, and payment information.
Choose Payment Mode
Select your preferred payment method (Net Banking, Debit Card, RTGS/NEFT, etc.).
Make the Payment
Complete the payment process.
Download Acknowledgment
After successful payment, download the acknowledgment receipt containing the CIN.
Generate Form 16B
After 5 days, log in to the TRACES portal (https://www.tdscpc.gov.in/) to download Form 16B, the TDS certificate.