What is TDS?
TDS which stands for tax deducted at source has been laid down by the Income Tax Act. Under this Act, if any Company or person makes a payment, then they have to deduct tax at source if their payment exceeds a certain threshold limit, which has been specified by the department. The TDS has to be deducted by keeping the prices in mind which has been prescribed by the Tax Department.
There are a deductor and a deductee in the pROCess. A deductor is a person or Company which makes the payment after deducting TDS, on the other hand, a deductee is that person or firm which accepts or receives the payment. The deductor has to deduct the TDS and submit it to the government, before making any form of payment. The TDS is linked to the PAN and therefore can be deduced in any form, either cash, cheque, credits or any other form of payment. The following are the types of payments in which the TDS has to be deducted:
Salaries
Interest payments by Banks
Commission payments
Rent payments
Consultation fees
Professional fees
What is TDS Return (Property Sale)
The TDS return for property ale has been mentioned in Section 194-IA of the Income Tax Act. The TDS Return for property sale is applicable when a buyer buys immovable property such as a building or part of a building or any land other than agricultural land which is more than Rs. 50 lacs. If done so, the person has to deduct the TDS at the time of paying to the seller. This is mandatory for everyone from 1 June 2013.
If the immovable property is either under construction or is fully built, and the value ranges up to 50 lacs or more, then the person or the Company has to pay a withholding tax of 1% from the sale consideration payable to the seller of the property. This TDS is deducted at the time of payment or in case of, if the payment is made in instalments then TDS has to be paid at every instalment.
Payment pROCedure
In order to make an online payment of tax, this could be done via the e-tax payment option. In this, the buyer has to fill an online form, 26QB. For this method, the following are required:
PAN details of the buyer and seller
Details of the property
The total consideration which is payable
All the payment details which have been made.
