As per section Table -Serial no. 3(i) of section 393(1) of Income Tax Act, 2025, the buyer of the immovable property will be liable to deduct TDS on any sum paid or payable as consideration to the resident seller at the rate of 1% on the date of payment/ credit whichever is earlier. The said section will be applicable only if such consideration is 50 Lakhs or more. Such TDS u/s 393(1) will be deposited within 30 days from the end of the month in which deduction has been made.

However, there is no limit on number of buyers or sellers for purchase of property. In sense, if the consideration of the property is 50 Lakhs or more, the buyers will be liable to deduct and deposit TDS on their specific shares. This section is made property wise and not buyer or seller wise.

Here, immovable property shall mean and include all properties irrespective of their intended purpose of use or their level of construction (other than agricultural land)

WHAT WILL BE TREATMENT OF TDS IN CASE THE BUYER HAS TAKEN HOME LOAN REGARDING PURCHASE OF PROPERTY?

One case which is really general in nature is the involvement of bank i.e. when the buyer takes home loan for the purchase of property. However, the law doesn’t state any other third party in the transaction but it is quite common. In such a case, specifically the buyer will be liable to deduct TDS and not the bank as the section lays the responsibility to deduct TDS on buyer and not on any third party like bank.

As in section, it is stated that “any person, being a transferee…”

Bank can’t be said to be transferee even if it is providing funds to the buyer.

Therefore, the whole TDS will be deducted by the buyer from the amount paid by him to seller and the bank will not be held responsible to deduct TDS on payment made by him on buyer’s behalf.

For Example

If A wants to purchase a property of Rs. 60,00,000/- and he has Rs. 15,00,000/- with him, the remaining amount of Rs. 45,00,000/- is financed by a bank as home loan. Now,

TDS to be deducted and deposited by A  = Rs. 60,00,000 x 1%

= Rs. 60,000/-

Now, Rs. 15,00,000/- will be given by A to seller but as per home loan terms, Rs. 45,00,000/- will be given by bank to seller. However, in this case, bank is not responsible or will not deduct TDS of seller. But it is A’s responsibility to deduct TDS. Therefore, A will pay

Payment by A to seller = Rs. 15,00,000 (A’s amount) – Rs. 60,000 (TDS)

= Rs. 14,40,000/-

In the end, seller will receive total amount of Rs. 59,40,000/- comprising of Rs. 45,00,000/- from bank and Rs. 14,40,000/- from A.

One more point here is to be noted that TDS will be deducted when the payment is made to the seller either one time or in instalments. Let say, if this Rs. 60,00,000/- is paid in 4 instalments, each and every time, TDS would have to be required to be deducted.

In that case, each instalment will be of Rs. 14,85,000/- (RS. 15,00,000- Rs. 15,000) after deducting TDS.

CONCLUSION:

It can be concluded that section 393(1) is payment centric for deduction of Tax but for its applicability total consideration of property is to be checked irrespective of the fact when and how much the payment has been done.

PROCESS FOR PAYMENT OF TDS U/S 393(1)

The law exempts such tax payers from the requirement of TAN. Now, the question arises, how will they deposit such tax to government and how the credit will be claimed?

There is a simplified process for such deposit of TDS which is shown in the flowchart below :

STEP – 1

TDS under Section 393(1) needs to be paid by online mode. Such TDS is required to be filed with Form 141 in which the PAN, name, addresses of both the parties, date of payment/credit, date of deduction and property details are required, on

https://eportal.incometax.gov.in/iec/foservices/#/e-pay-tax-prelogin/user-details

STEP – 2

Schedule B is to be filled under Form 141. Due date is within 30 days from the end of month in which tax deducted. CIN is generated after successful payment.

STEP – 3

Within 7 days, the buyer has to register himself as tax payer on TRACES website. However, before registration, make sure that you are available with the PAN of both buyer and seller. However, no TAN is required in any case. Simultaneously, check your Form 168 and the same payment of TDS wilI be reflected in the form 168.

STEP -4

After checking the 168, you have to request for the Form 132 from Downloads tab of Traces after login to your account. After filling the required details Iike Acknowledgement number of Form 141, PAN etc., Form 132 wiII be available within few hours of the request. This form 132 is required to be given to seller by the buyer.

 

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