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Want to buy a home? You must know the associated TDS rules!

Being the owner of your own house is one of the biggest dream of a common Indian. People burn the candle at both ends for several years to fulfill this dream. For most of us, purchasing a house is the biggest financial transaction we will ever make in our life. It takes a long time for a person to move from planning stage to actual purchase because one wants to be sure as God made little green apples before taking such a big decision. People analyze several factors like location, price, etc. before taking the final step. However, there is one important thing which they miss. They forget the associated tax rules.

If you are planning to buy a property worth more than Rs. 50 lakh from a resident Indian then you must know that the Income Tax Act makes it compulsory for a buyer to deduct 1% TDS on any immovable property purchased on or after 1st June 2013, if the transaction value is more than Rs. 50 lakh.

Rules are entirely different when it comes to purchase of property from an NRI seller, which we will try to understand in our next blog. For now, let us have a look at the tax rules pertaining to purchase of property from a resident Indian seller.

Key points in case of purchase of property from a resident Indian seller:

1) As a buyer, the responsibility to deduct TDS and pay it to the government lies with you.

2) The deducted TDS should be deposited with the government within 7 days (30 days from 1st June 2016) from the end of the month in which TDS is deducted.

3) TDS should be deducted at the time of payment/credit to the seller, whichever is earlier. So, if you make the payment in installments then you should deduct TDS on each installment.

4) If you paid more than Rs. 50 lakh as consideration for the purchased property, then you should deduct TDS on the entire value and not on the value in excess of Rs. 50 lakh.

5) In case if the seller does not provide his PAN then the TDS has to be deducted @ 20%.

6) You can pay the TDS to the government account by e-filing an online return cum challan “Form 26QB”. E-filing of this form can be done at Govt. Site.

7) You will have to provide all the details of the property, purchaser, seller etc. Once you fill up the online challan you can make the payment of TDS by logging in to your online bank account. Alternatively you can pay the TDS by depositing the amount at the authorized bank along with the acknowledgement of the online challan.

8) After depositing the TDS, you also need to issue TDS certificate also known as Form 16B to the seller. You can download it from your account on www.tdscpc.gov.in if you are already registered.

9) You must not forget to issue Form 16B to the seller, within fifteen days from the due date for furnishing the challan-cum-statement in Form 26QB.

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H&R Block India
H&R Block India
H&R Block India is the subsidiary of the world's leading tax filing company, H&R Block, US. In India we provide online and personalised tax filing services for individuals, professionals and businesses. We also provide managed services for GST.


  1. Arnie says:

    This is an article that makes you think “never thought of that!”

  2. Puneet says:

    Thanks. very informative article.

    I also saw one of your older article here: https://www.hrblock.in/videos/pre-emi-interest.aspx

    Question is: If I close this loan account now, will I still be able to claim tax benefits for pre-EMI’s for next remaining (out of 5) years?

  3. paras joshi says:

    Tds deducted on salary can get refunded to the assesee if does not file IT return. As he is not registered on IT website

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