Why Do Homebuyers Need to Know About TDS on Property?

Tax Deducted at Source or TDS on property is applicable on purchase of immovable property such as residential and commercial plots whose market value is higher than Rs.50 lakhs. Homebuyers should know about TDS because individuals making property purchases are stipulated to pay 1% TDS on the value of a property to the Income Tax department.

As per Section 194 of the Income Tax Act, it is mandatory for home buyers to pay TDS on property purchase above 50 lacs. Additionally, home buyers should know that TDS is payable on the total worth of the property and not on the difference between the property price and Rs.50 lakh.

How to pay TDS online? 

Individuals residing in Delhi have to pay property tax in Delhi along with TDS on the purchase of properties in this area. Prospective buyers can pay TDS online by following the procedure mentioned below –

• Visit the official website of TIN-NSDL.
• Under the TDS/TCS section, choose ‘Challan No./ITNS 281’. 
• Select ‘Non-Company Deductees’ in case of purchase of non-corporate properties. 
• Enter the Tax Deduction and Collection Account Number (TAN) and select the year of assessment.
• Choose the ‘Nature of Payment’ along with ‘Mode of Payment’. 
• Select net banking, credit card or debit card as the preferred mode of payment. 
• Click on the ‘Submit’ tab. 
• TDS payers will be directed to the net banking page after confirming the details provided. 
• After payment, collect the challan which contains payment details and name of the financial institution. 

Residents should preserve the TDS challan and house tax in Delhi receipts for various financial purchases. Individuals have to provide these documents while availing financial assistance in the form of home loans and loan against property.