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Real Estate Transactions: Understanding TDS on Property Purchase

If you've recently invested in property worth more than Rs 50 lakh, it's crucial to grasp the Tax Deducted at Source (TDS) implications. Here's a concise guide:

What is TDS in Real Estate?

As per Section 194IA, buyers need to deduct 1% TDS on property transactions exceeding Rs 50 lakhs. This amount must be submitted to the government within 30 days from the transaction month.

Payment Due Date:

For each instalment, the TDS due date is within 30 days from the payment month. E.g., if you made a payment in February, ensure TDS submission before March 30.

Forms You Need:

File online through Form 26QB for TDS information. Remember to submit Form 16B to the seller to ensure tax credit for deducted TDS.

Penalties for Non-compliance:

Late payments attract interest under Section 201(A) and 201(IA), along with potential penalties. It's crucial to adhere to these regulations to avoid legal consequences.

Important Points:

1. Agricultural land transactions are exempt.

2. TDS applies to each instalment for properties exceeding Rs 50 lakhs.

3. Deduct 1% TDS on the total compensation.

4. In case the seller lacks PAN, TDS is deducted at 20%.

For a seamless real estate journey and to navigate the complexities of TDS, connect with us at Alliance Tax Experts. Your financial well-being is our priority!