Most of the property buyers are not aware that on purchase of property above 50 lacs buyer must deduct tax and file the same with the Government. This is not applicable to agricultural land. The purpose of this law is to tackle the tax leakages and black money in any kind of immovable property transactions. On missing to deduct and pay tax (TDS) to the Government one must pay interest as well as late filing fees which can be high. Let’s break the law into simple language so that you have a good clarity over TDS on purchase of property form Resident Indian:

  • TDS deduction is on entire amount not after 50 lacs. Example I buy a property worth of 65 laks in this case I will deduct TDS of 6 thousand which is 1%.
  • TDS is deducted whenever the payment is made to the seller, therefore it could be on any advance amount being paid or lump sum amount you pay or any down payment or any installment you pay to the seller. So, the date of transfer is not important here, but the date of payment is important to determine when to pay and file TDS.
  • When Bank is paying to the seller, ideally bank is paying on your behalf as you have taken loan so here it is not bank’s responsibility. As per law it is your (Buyer’s) responsibility to pay TDS and file the same.
  • TDS is to be deducted and file separately by each buyer in case the property is being purchased by multiple parties.
  • Date of payment of TDS is calculated like this, one from end of the month in which you made payment to seller, example you paid 2 lakhs on 28th march and other different amounts in different dates in April. In this case you will have to make payment of TDS on 2 lakhs by end in April and rest for the Emi’s of April- Due date of TDS payment will be done by end of May
  • For payment of the TDS and furnishing the same to Government, you have to fill Form-cum-challan No 26QB, that means you make payment as well as filing through this same form.
  • The details needed to file is simple- pan, address of buyer/s seller/s and the address of property being purchased.
  • Filing and payment can be done online. You can take TAXVIC teams help to file the same as a very minimal affordable cost as our fees.


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