The process of deducting and depositing TDS on property sales is straightforward but must be followed carefully to avoid penalties. When a buyer purchases a property worth ₹50 lakh or more, they must deduct 1% TDS from the total sale value before making the payment to the seller. The deducted amount must then be deposited with the Income Tax Department within 30 days using Form 26QB.
Step-by-Step Process to fill Form 26QB:
- Deduct TDS – Before transferring the payment to seller, deduct 1% of the sale value and inform the seller.
- Fill Form 26QB
a. Access the E-Filing Portal and login using your own PAN and Login Password.
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- Visit the e-filing portal.
- Under the "e-File" menu, click on "e-Pay Tax".
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b. Initiate Payment
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- Click on "New Payment".
- Select "Proceed" under the "26QB (TDS on Sale of Property)" section.
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c. Fill the Form 26QB
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- Provide the necessary details, including:
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- Residential Status of the seller
- PAN of both seller and buyer
- Communication Details of both parties
- Property Details
- Amount Paid/Credited & Tax Details
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d. Choose the Payment Mode
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- After submitting the form, select a payment method:
- Net Banking/Debit Card/Pay at the Bank Counter/RTGS/NEFT/Payment Gateway.
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e. Confirm and Complete Payment
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- Click "Continue" to proceed with the payment.
- Upon successful payment, a Challan Counterfoil will be generated, containing:
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- CIN (Challan Identification Number)
- Payment Details
- Bank Name
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This counterfoil serves as proof of payment.
3. Generate form 16B.