TDS / TCS RETURN FILING AND TDS ON PROPERTY PURCHASE

 

Basic Information

 

Tax Deduction and Collection Number (TAN) is mandatory 10 digit alpha-numeric number required to be obtained by all persons who are responsible for Tax Deduction at Source (TDS) or Tax Collection at Source (TCS). The person deducting the tax at source is required to deposit the tax deducted to the credit of Central Government through Authorized Bank quoting the TAN number in the relevant Challan.

 

LegalRaj Expert can help you to obtain TAN Registration.

 

Due date to deposit TDS/TCS during the preceding month is 7th day of the following month. For the month of March, due date is 30 April.

 

Salaried Individuals are not required to obtain TAN or to deduct tax at source excluding specified transactions. However, an individual or HUF has to deduct tax at source if they were liable to get their accounts audited in the previous year. Other entities i.e. Private Limited Company, Public Limited Company, LLP, Partnership Firm etc. must deduct tax at source at the specified rate at the time of making payment/credit exceeding limit specified by the Tax Department from time to time.

 

Entities having TAN Registration must then file TDS returns quarterly. LegalRaj Experts can help you by computing TDS Liability and filing/e-filing your TDS returns online which will help you to keep yourself  compliant with TDS regulations.

TDS Filings must be made quarterly on 31st day of July, October, January and May. However, TCS Filings must be made quarterly on 15th day of July, October, January and May.

 

Non-filing of TDS Returns within the due date attracts penalty.

 

FORM 26QB FILING - TDS ON SALE OF IMMOVABLE PROPERTY / TDS ON PROPERTY PURCHASE

 

From 1st June 2013, when a buyer buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than or equal to Rs.50 lakhs, then buyer has to deduct TDS when he pays consideration to the seller. The buyer has to deduct TDS at 1% of the total sale consideration as per Section 194-IA of The Income Tax Act, 1961. This is applicable even when there is more than 1 buyer or seller.

 

That amount shall be paid to the credit of the Central Government within a period of 30 days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB.

 

Also, Buyer shall furnish the certificate of deduction of tax at source in Form No. 16B to the payee within 15 days from the due date for furnishing the Challan-cum-statement in Form No. 26QB under Rule 31A.

 

There is no need to get TAN registration to file Form No. 26QB.

 

No deduction shall be made where consideration for the seller of an immovable property is less than fifty lakh rupees.

 

Consequences of Late filing

 

  1. Late Fees : As per Section 234E, Late fee of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS. Late filing fees should be deposited before filing the TDS Return. Rs.200 is a late fee and not a penalty.

 

  1. Penalty : As per Section 271H of Income Tax Act,1961, which provides that a deductor shall pay penalty of minimum Rs. 10,000/- to Rs. 1 lakh for not filing the TDS statement within one year from the specified date within which he was supposed to file the statement. Penalty under section 271H will be in addition to late filing fees prescribed under section 234E as above. The penalty is also applicable for filing incorrect TDS/TCS Return.

 

Advantages

 

  1. To avoid further Late Fee and Penalty.
  2. To comply as per the Provisions of Income Tax Act, 1961.
  3. The Correct transaction of Property purchase gets reported to the Government through payment of TDS which is also a proof to avail loan to buyer.