TDS stands for Tax deducted at source. As per the Tax ACT, 1961, TDS (Tax Deducted at Source), is a method of indirect tax collection made by the Indian authorities. The main motive behind bringing this rule in the picture is to track all the high priced realty transactions that are not registered.
CBDT (Central Board of Direct taxes) that comes under the IRS (Indian Revenue Services) is responsible for managing TDS on property. And the purpose of collecting TDS on purchase of the property, is to keep stable the income source for the Government throughout the year.
TDS has to be deducted on an every immovable property like Villa, Shop, Bungalow, Plot, House, Pent House etc. except the agricultural land.
From 1st June 2013, Section 194IA came into effect and it clearly states that it is mandatory to deduct TDS at the source from the value paid to the transferor or the seller of the immovable property. The person who is buying an immovable property has to deduct TDS on purchase of property but it is not compulsory to provide TAN (Tax Deduction and Collection Account Number) details.
The main motive behind introducing this provision was to remove the under reporting and undervaluation of the transaction related to a particular property.
It is the responsibility of the sub-registrars to check that the transactions do not take place without including TDS documents. And it was decided to educate the sub-registrar’s regarding the provision of TDS on purchase of property, in the workshop that was organized by IT department and Stamp and registration department.
Sub-registrar’s always make sure that the permanent address and the PAN details of the immovable property seller is available, because many a times it happens that the seller is not traceable by the department. Under the section of 194IA, it is necessary to mention the PAN details in every transaction. And now a format has been introduced for the TDS on property, which is to be strictly followed. This format has made it easy for the departments to track cases.
Facility for TDS payment on Property:
In past decades, the real estate sector in India has seen an epic change and has made all the realty registrations computerized in a well-organized manner, thus reducing the manual paper work to an extreme extent.
TDS (Tax Deduction at Source) is one such process in realty factor that has gone under many twists and turns.
And to reduce the tedious paper works the TDS payment facility is made online.
The buyer of the immovable property has the option to pay the TDS tax online through the e-tax payment option immediately or at a subsequent date. He can also make the payment by visiting any authorized bank Branch, which is another alternative for TDS payment. However, the e-tax payment made by these branches is done without the digitization of any Challan. The bank will get the Challan details from the online form filled on www.tin-nsdl.com
How to pay Tax (Tax Deduction at Source) online via E-tax Payment option?
For e-tax payment online the buyer should have a net banking account with the authorized banks. And to check whether your bank is authorized or not, go to TIN website, it will provide you a list of authorized banks.
After that follow the give procedure below,
- Log on to tin-nsdl.com (NSDL – TIN website).