Fear not! While it might sound complicated, understanding TDS on property is simpler than you think. It’s a straightforward process, essential for both buyers and the government — and something reputable builders like Siddhi Homes will guide you through effortlessly.

What Exactly Is TDS on Property?

Simply put, when you purchase an immovable property (excluding agricultural land) worth ₹50 lakh or more, you, as the buyer, are responsible for deducting a small percentage of the payment as tax and depositing it with the government on behalf of the seller. This is known as TDS under Section 194-IA of the Income Tax Act. It isn’t an additional tax over your property cost but rather a portion of the payment that goes directly to the tax authorities.

The Rate: Currently, the TDS rate on immovable property stands at 1% of the total sale consideration. For example, if your property costs ₹60 lakh, you would deduct ₹60,000 as TDS before making the payment to the seller.

This process ensures smooth tax compliance and helps the government track high-value real estate transactions.

Your Step-by-Step Guide to Handling TDS as a Buyer:

Step 1: Ascertain the Property Value and TDS Amount.

Before making the payment, confirm the total sale consideration of the apartment or villa you plan to buy, including any additional costs such as parking and amenities. If the total value is ₹50 lakh or above, calculate 1% of that amount — this is the sum you must deduct from the payment made to the seller as TDS.

Step 2: Obtain the Seller’s PAN (Permanent Account Number)

This step is absolutely essential. You cannot deposit TDS without the seller’s valid PAN. Always ensure you collect a clear copy of their PAN card, along with their address and other key details, before proceeding. If the seller fails to provide a PAN, the TDS rate automatically increases to 20%, making this verification extremely important.

Step 3: Deduct TDS from the Payment to the Seller

When making the payment to the seller, ensure that you deduct the calculated 1% TDS amount from the total. For instance, if the property value is ₹75 lakh, you would pay ₹74.25 lakh to the seller and retain ₹75,000 as TDS. Reputed builders in Kochi like Siddhi Homes usually collect payments net of TDS and assist their clients throughout the TDS remittance process.

Step 4: Deposit the TDS with the Government (Using Form 26QB)

If your builder doesn’t assist with the process, you can complete it online. Visit the NSDL (National Securities Depository Limited) website and fill out the Challan-cum-Statement Form 26QB. This form requires details of both the buyer and seller (including PANs), the property details, and the amount of TDS deducted.

Key Points for Form 26QB:

• Ensure that all information is filled in accurately.
• You can either make the payment immediately through net banking or generate a challan to pay at an authorised bank branch.
• Once paid, you may provide a copy of the challan to your builder for their records.
• The TDS must be deposited within 30 days from the end of the month in which the deduction was made (for example, if you deducted tax in April, it must be deposited by May 30).

Step 5: Issue Form 16B to the Seller

Once you've deposited the TDS, you, as the buyer, need to issue a TDS certificate (Form 16B) to the seller. This certificate confirms that you have deducted and deposited the tax on their behalf. You can download Form 16B from the TRACES website (TDS Reconciliation Analysis and Correction Enabling System) roughly 10-15 days after the TDS has been deposited and processed.

Why This Matters (and Why It’s Simple with the Right Help)

Understanding and fulfilling your TDS obligations ensures a smooth, legally compliant property transaction that protects both you and the seller. While these steps might seem many, the online process through Form 26QB is simple and user-friendly. Moreover, partnering with experienced builders like Siddhi Homes in Kochi means you’ll have expert guidance throughout, making the entire journey to owning your dream home effortless.

So, as you envision your new flat or villa in the vibrant community of Kochi, rest assured — navigating the financial formalities like TDS is no obstacle when you have the right support.

FAQs

Who is responsible for deducting TDS when buying a property in Kochi? 

The buyer is responsible for deducting TDS (Tax Deducted at Source) when purchasing immovable property (like flats or a villa in Kochi) valued at ₹50 Lakhs or more.

What is the current TDS rate on property purchases in India? 

The current TDS rate under Section 194-IA is 1% of the total sale consideration if the property value is ₹50 Lakhs or above.

What if the seller does not have a PAN?

If the seller does not provide a valid PAN, the TDS rate increases to 20% instead of 1%. It's crucial for the buyer to obtain the seller's PAN to avoid this higher deduction.

How and when do I deposit the TDS amount after deducting it? 

The TDS amount must be deposited online using Form 26QB on the NSDL website. This must be done within 30 days from the end of the month in which the deduction was made.

As an NRI buyer, are there any special TDS considerations for buying property in Kochi? 

For NRI sellers, the TDS rules are different (Section 194-IA does not apply). However, if you, as an NRI, are buying property from a resident Indian seller, Section 194-IA and the steps outlined above generally apply. It's always advisable for NRIs to consult with a tax advisor familiar with Indian property laws.

Can a real estate builder help me with the TDS process? 

Reputable builders like Siddhi Homes in Kochi often have dedicated teams or can recommend professionals who can guide you through the TDS process, ensuring all formalities are correctly completed.

Conclusion

Whether you’re buying a luxury villa or a modern apartment in Kochi, understanding TDS ensures peace of mind and legal clarity. At Siddhi Homes, we believe in helping every buyer make informed decisions—so your journey to owning your perfect home is as transparent as it is fulfilling.

Looking to buy your dream home in Kochi? Explore Siddhi Homes’ elegant apartments and villas designed for modern living.