Further the provision applies even to such immovable property agreements that are entered into before June 1, 2013, subject to the condition that the payments are made on or at a later date than June 1, 2013. The law applies even under the circumstance when the payment to be made after the stipulated date from which the law holds true i.e. June 1, 2013 is below Rs. 50 lakhs however total consideration in respect of the deal is over Rs. 50 lakhs.
The tax has to be withheld or deducted at source for earlier credit or payment of the sale consideration to the seller. So, in a case when the payment is made in installments, for each installment paid tax is to be deducted at source.
The tax amount is required to be deposited, at the time of payment or credit of the sum (whichever is earlier) to the Indian resident seller, with the government within 7 days in the from the month end in which the tax was deducted. Failure to abide by such a ruling i.e. non-deduction of tax at source imposes penalty on the property purchaser. And even in the case when payment to the seller of the property is made through the finance company, the mandate in respect of withholding tax at source has to be followed.
Form to be filled for submission of such withholding tax with the government
For complying with the stipulated ruling of TDS at source by the transferee or buyer of the property for a immovable property transaction over Rs. 50 lakhs, buyer does not need to have a tax-deduction account number (TAN) for filing taxes. And instead, form 26QB which is the statement of tax under Sec 194-IA can be obtained from the tin.nsdl website and filled for depositing the applicable tax amount. The tax withheld can also be paid online.
Other provisions to be complied with for the tax deduction at source
Every person responsible for tax deduction at source for property purchase transaction has to furnish the certificate of tax deduction at source in Form 16B to the payee.