When purchasing property in India, one critical financial obligation you must fulfill is the payment of Tax Deducted at Source (TDS). This measure was implemented by the Indian government under Section 194-IA of the Income Tax Act to combat tax evasion. TDS on property applies to all transactions exceeding ₹50 lakh and ensures that taxes are collected at the source. Here’s a step-by-step guide on how to pay TDS on purchase of property. Understanding TDS on Property PurchaseContentsUnderstanding TDS on Property PurchaseStep-by-Step Guide to Pay TDS on Property PurchaseStep 1: Tax DeductionStep 2: Obtain TANStep 3: Paying the TDSStep 4: Generate and Issue a TDS CertificateStep 5: Record KeepingCommon Mistakes to AvoidConclusion Eligibility for TDS: TDS is applicable when the transaction value of the property is over ₹50 lakh. It is the responsibility of the buyer to deduct 1% of the transaction amount as TDS. Transactions Covered: This tax applies to all types of property transactions excluding agricultural land. Step-by-Step Guide to Pay TDS on Property Purchase Step 1: Tax Deduction Step 2: Obtain TAN Step 3: Paying the TDS Step 4: Generate and Issue a TDS Certificate Step 5: Record Keeping Common Mistakes to Avoid Conclusion Paying TDS on a property purchase is a crucial step that aligns with legal tax compliance in India. By following the outlined steps, property buyers can ensure they fulfill their tax obligations accurately and efficiently. Always stay updated with any changes in tax laws related to property transactions to avoid any pitfalls.