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1% Tax Deduction (TDS) On Property Sale From 1st October, 2012


Tax deducted at source (TDS) on sale of immovable property will be applicable from October 1st, 2012. As per the announcement in budget 2012, w.e.f. 1st October every one making payment against purchase of immovable property (other than agricultural land) shall deduct 1% tax on the total amount if the value of the property is more than Rs 50 lakh in case of urban areas and Rs 20 lakhs in case of other areas.

budget 2012


Transferee have to make the payment of TDS collected using the challan of payment of TDS.

To make better compliance of the provision, to get the registration of the property transferee have to generate the proof of deduction of tax and payment of TDS.

Although transferee need not have a Tax deduction and collection account number (TAN) or to provide and TDS statement against the deduction of tax as in most of the cases this would be one time transaction.

To make the process of filing TDS simpler for people, a one pager simple challan forms will be provided which will require the details of the property, transferor and transferee.

Highlights Of TDS On Sale Of Immovable Property

  • TDS deduction on sale of property will be effective from October 1st, 2012.
  • The rate of TDS on transfer of property will be deducted at the rate of 1%.
  • Transferee have to submit the amount of TDS deducted using TDS payment challan before registration of property.
  • Property registration will not be done without proof of TDS deduction and payment.
  • Transferee will be required to have TAN for the deduction of TDS for transfer of property.
  • Government will provide simple TDS payment challan for the payment of TDS deducted by transferee at the time of making payment against property purchase.

So we can conclude this TDS deduction will take the value of the immovable property up after the implementation of the section 194LLA  i.e from 1st October 2012.

ALSO READ : Budget 2012 : Alternate Minimum Tax (AMT) – An Additional Direct Tax On Individuals

ALSO READ :- Highlights Of Indian Union Budget 2012

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