Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > How to Deduct TDS on Home Loan in India?

Loan for Home

How to Deduct TDS on Home Loan in India?

How to Deduct TDS on Home Loan in India?

Whenever a buyer purchases a property from the seller, TDS needs to be deducted.

The law states that it is the buyer’s responsibility to deduct TDS. But in case of a home loan, the buyer does not pay the seller directly. Instead, the lender pays the seller on behalf of the buyer. That is why home loan TDS deduction is hard to follow.

The buyer can either deduct the TDS themselves or request a lending institution to do it on their behalf. Read below to learn more about both of these methods.

How can a buyer deduct TDS?

Consider the following example. X is purchasing a property from Y for Rs. 1 crore. X takes a loan for Rs. 40 lakhs from the lender Z. Since the lender is not responsible for deducting TDS on home loans, Z will pay Rs. 40 lakhs to Y directly, without deducting TDS. The remaining amount will be self-financed by X, and while paying this amount, X must deduct TDS @ 1%. See the calculations below for more clarity.

Consideration1,00,00,000
Less: Loan amount paid by Z(40,00,000)
Balance60,00,000
Less: TDS deducted by X (1% of 1,00,00,000)(1,00,000)
Net amount payable by X to Y59,00,000

* Note that for properties sold between 14.05.20 and 31.03.21, the rate of TDS applicable is 0.75%.

How can a buyer get the lender to deduct TDS on their behalf?

Step 1 – Write an application

Once the lender sanctions your loan, write an application requesting them to deduct TDS on your behalf, and submit it before the first disbursement. Furnish the details of the bank account where the lender must transfer the TDS amount after deducting it. You must also show all the relevant computations in the application. You can use an online home loan calculator for TDS and other calculations. Remember to collect an acknowledgement for the application.

Additional Read: Importance of Home Loan Sanction Letter

Step 2 – Inform the seller

Inform the seller that TDS will be deducted from the loan amount. Ideally, you should mention details about the deduction of home loan TDS in the Sale Deed/Agreement itself, to prevent any confusion or disputes in the future.

Step 3 – Deduction and disbursement

The lender will deduct TDS @ 1% and disburse the remaining amount to the seller. The TDS deducted will be transferred to the specified bank account.

Additional Read: 10 Important Clauses in a Home Loan Agreement Everyone Must Know

Step 4 – Deposit the TDS

Deposit the TDS within the applicable deadline. Share a copy of the TDS certificate with the seller and the lender.

Are you looking for attractive home loan interest rates? If yes, then Tata Capital is the right lender for you. Our loan application process is hassle-free and involves minimal documentation. To make it easier for you to pay the home loan EMI, we offer flexible repayment options.

We also have years of experience in the industry and offer dedicated after-sales support. Visit our website today to assess your home loan eligibility using our online home loan eligibility calculator.

Apply For Home Loan

Say Hello to Your New Home with Our Easy Home Loans!

Apply now
Popular Searches
anyror modt charges 712 utara online gujarat pre emi calculator earnest money deposit Goa Land Record earnest money khasra number meebhoomi Assam Land Record
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.