TDS on
Sale of Property in India: Rules, Rates & Exemptions
What is TDS on
Sale of Property?
TDS (Tax Deducted at Source) on property transactions
ensures that the seller’s income is reported to the Income Tax Department.
- Applicable
if property value ≥ ₹50 lakhs.
- Deducted
by the buyer, not the seller.
- Ensures
tax compliance and prevents underreporting of property
transactions.
Focus: TDS
on property sale, TDS on sale of property in India
Rules of TDS on
Property Sale in India
- Applicability:
- Deducted
@ 1% on property transactions above ₹50 lakhs.
- Applies
to both residential and commercial properties.
- Not
applicable on rural agricultural land.
- Responsibility:
- Buyer
must deduct TDS and deposit it with the government.
- Seller
gets balance payment after deduction.
- Form
Used:
- TDS
must be deposited through Form 26QB.
- Deadline:
- Deposit
within 30 days of the month when payment is made.
Focus: TDS
rules on property, Form 26QB TDS payment
TDS Rates on Property Transactions
- Resident
Seller → 1% of sale consideration.
- NRI
Seller →
- 20%
on Long-Term Capital Gains (LTCG).
- 30%
on Short-Term Capital Gains (STCG).
- Plus
applicable surcharge and cess.
In NRI cases, buyer
may need a TAN (Tax Deduction Account Number).
Focus: TDS on property sale NRI, TDS rate on sale
of property
Exemptions from
TDS on Sale of Property
You don’t need to deduct TDS if:
- Property
value is less than ₹50 lakhs.
- The
property is rural agricultural land.
- Seller
has obtained a nil or lower TDS certificate from the Income Tax
Department.
Keyword Focus:
TDS exemptions property sale India
How to Pay TDS on
Property Sale Online
- Visit TIN-NSDL website.
- Select
Form 26QB.
- Enter buyer
& seller PAN, property details, and TDS amount.
- Pay
online via net banking / challan.
- Download
Form 16B (TDS Certificate) and provide it to seller.
Keyword Focus:
how to pay TDS on property online, Form 26QB property TDS
Penalties for
Non-Compliance
- 1%
per month interest for non-deduction.
- 1.5%
per month for non-payment after deduction.
- Late
fee of ₹200/day (Section 234E).
- Heavy
fines under the Income Tax Act.
Key Takeaways
- Buyer
must deduct TDS on property sale if value ≥ ₹50 lakhs.
- TDS @ 1%
for residents, higher for NRI sellers.
- Use Form
26QB for online payment.
- Seller
can claim TDS credit while filing ITR.
FAQs on TDS on
Sale of Property
Q1. Who is responsible for deducting TDS on property
sale?
The buyer is responsible for deducting and depositing TDS.
Q2. Is TDS applicable if property value is ₹48 lakhs?
No, TDS applies only if the value is ₹50 lakhs or more.
Q3. Can seller claim refund of TDS?
Yes, the seller can claim TDS credit in ITR.
Q4. What is the TDS rate for NRI property sellers?
20% on LTCG, 30% on STCG, plus surcharge and cess.
