TDS and All You Need to Know


TDS and All You Need to Know

For the first-time home buyers, a lot of things might seem new, especially TDS. The concept of TDS was introduced with an aim to collect tax from the very source of transaction. TDS stands for Tax Deducted at Source and usually deducted with the rates provided by the Tax Department.

When should TDS be deducted and by whom?

As of today, when the amount exceeds or is equal to Rs. 50 lakhs, TDS is applicable on the purchase of property value. The purchaser of the property deducts a tax of 1% when making the payment for the purchase. This deducted tax is then deposited by the purchaser, to the Government through any authorized bank branches using the e-Tax payment option available at NSDL. This transaction needs to be completed by the 30th of the next month.

Whether it is cost to buyer?

No. There is no cost to the buyer due to TDS. The amount of TDS will be deducted from the amount payable to seller. On submission of TDS certificate to the seller, he will give credit of that amount to you. For example, suppose you are paying an installment of Rs 10 lacs for a property value of Rs 70 lacs. Then you have to pay Rs 990000 to builder/seller and balance Rs 10000 towards TDS to government.

What is the procedure to deposit TDS amount?

To make the TDS payment you have to be ready with the PAN of the Buyer and the Seller, complete address of both the parties, complete address of the property, value of the property and the TDS amount to be paid. With these documents, you can now proceed with the TDS payment on their website.

  • Log in to ‘’
  • Click on services and then select ‘TDS on sale of property’ option
  • Click on ‘Online form for furnishing TDS on property’
  • Fill the mandates with necessary information under ‘tax payer’ option
  • Proceed with the complete addresses of both buyer and seller
  • Provide the property details along with tax and amount to be deposited
  • Confirmation page will verify the details entered
  • Nine-digit alpha-numeric acknowledgement number is generated on confirmation
  • On submission to authorized bank, log on to the net-banking website
  • Enter user ID and password authorized by the bank for net-banking purpose
  • Enter the payment details on successful login
  • Successful payment generates ‘Challan Counterfoil’ containing CIN, payment details and name of the authorized bank. This ‘challan’ serves as a proof of payment being made for TDS.

TDS credits in form 26AS

7 days after the TDS payment, it is reflected in 26AS, under Part-B. The purchaser can now login to the TRACES system, registering themselves as a tax payer and requesting form 16B by entering the ‘Acknowledgement Number’ appearing in Part-F of 26AS. Once the request number is generated within 24 hours of request, the deductor can login to the TRACES system and download this form under ‘Requested Downloads’ option. As this form is marked available, the purchaser can download the Form 16B and furnish it to the seller.

These are the basics in regard to TDS on purchase of property and the steps on how you can proceed with the online submission.

Here is a step-by-step guide on TDS: