What new house purchase taxes you are required to pay?

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The Income Tax Department had recently issued a circular that if seller of a property has not linked his PAN and Aadhaar then, the property’s buyer will have to pay 20 per cent TDS.  The total price of the house that you have to pay to purchase your dream home includes various taxes and duties, stamp duty and registration charges.

According to section 194-IA, if somebody purchases a house, then, he or she will have to pay 1% TDS on behalf of the seller if the property price is above Rs 50 lakh. But you must check whether the PAN and Aadhaar of the current owner of that property are linked or not. In case, these two documents are not linked, then, you will have to pay 20% TDS on behalf of the seller.

Now let’s see how can you calculate the TDS?

The TDS should be one per cent of total price of the house or stamp duty value of the property. Whichever will be higher among these two, you will have to calculate the TDS on it.

Now, lets see what is the procedure of paying the TDS?

You can pay the TDS on the Income Tax portal of the IT Department which is www.incometax.gov.in. You can also pay a visit to your bank’s branch to submit the TDS if you don’t want to submit it online. Lets see how you can submit the TDS online:

For online TDS payment, you will have to submit two forms, one is Form 26QB that you would get on the IT department’s portal. And the other is Form 16B.

You have to deduct and submit the TDS within next seven days of the next month from the end of that month in which you have paid the seller the price of the property.

You will require your and the seller’s PAN and Aadhaar numbers along with address details to fill the Form 26QB.

The e-portal will show up automatically how much TDS amount you will have to deposit. After you make the TDS payment, a

You will then need to register yourself on another platform of the IT Department which is the TRACES platform. You will be able to register on it using the challan number that you had generated on the income tax portal. This is because the TDS which you had submitted on the IT portal its certificate you will get only on the TRACES platform.

TRACES website is tdscpc.gov.in

It is only after you register on TRACES that you will be able to obtain Form 16B and the TDS certificate.

You will then have to issue the Form 16B to the seller.

Note that you will have to pay the TDS to the government. Otherwise you will get a tax notice from the IT Department that you have purchased a property and you haven’t submitted the TDS.

After you have made the TDS payment, you will then have to issue Form 16B to the seller. This is also mandatory. Once you have issued the form, then, your job as a buyer is complete in the eyes of IT department. Then, it is the seller who will have to fill the Form 16B and submit it to government authorities.