Income Tax: Bought new property? This is the form you need to file tax

During the year, the government has announced various reforms to make purchasing of houses affordable. With that coming into place, if you have recently bought a house, then you need to know about the income tax filing process. 

Archit Gupta, CEO and founder, ClearTax, said, "If you purchase a property of more than Rs 50 lakh value, you need to deduct TDS at 1% from the payment you have made. The purchaser has to deposit this TDS with the government using Form 26QB and file TDS returns for the same. This clause is applicable even when the payment for the property is made in more than one instalment."

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TDS is to be deducted from whole amount to be paid. For eg. if a property is bought for Rs 70 lakh then TDS has to be deducted on the entire amount that is Rs 70 lakh, not on just the Rs 20 lakh that exceeds the Rs 50 lakh threshold.

From June 1,  2013, when a buyer (Indian Resident) buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50 lakhs, he has to deduct TDS when he pays the seller. So, TDS is required to be deducted and you will also have to pay late fee and interest.

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On the other hand, if you are staying on a rented flat, the tax filing structure will be different. 

For a taxpayer staying on rent, if the monthly rent is more than Rs 50,000, then the payment has to be made after deducting 5% TDS. This TDS has to be deposited with the government using Challan 26QC and TDS returns for the same have to be filed. This came into effect from 1 June 2017. This TDS can be deducted only once at the end of the financial year or the last month of tenancy during the year. 

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TDS deducted should be paid within 30 days from the end of the month in which the tax is deducted. It shall be accompanied by a challan (cum) statement in Form 26QC. The TDS so deducted can be paid to the government electronically through Reserve Bank of India, State Bank of India, or any authorized bank.