Latest Rule by the Income Tax for Property Buying – 1 % TDS Deduction by the Seller
The Income Tax and the Government of India has imposed various Taxes over the years to a Home Buyer. A few years back 3.09% Service Tax and 1% Vat was introduced.
Under the New Rule which is applicable to Resale, Ready Possession, Under Construction properties, the Buyer is to deduct a TDS of 1% on the total purchase value of 50 Lacs including Service Tax. This New Rule is not applicable to NRI’s and they shall continue with the old provisions of the law.
The New Rule is effective from 1st July 2013. In the event if you have already bought a property, then you have to continue to deduct the TDS on the residual value if any paid after 1st July 2013.
In cases, where there is a Bank Loan on the property, then it must be clarified with the Bank and Instructions given to the Bank for deduction. Usually, Banks would come out with some kind of structuring in this to assist the home buyers, but please recheck with the Bank.
The Tax deduction is the liability of the Buyer and the buyer in Turn has to comply with the Government regulations of filling the same on Line on the website which is www.tin-nsdl.com or www.incometaxindia.gov.in or alternately make make an E-Payment of the TDS. The other option would be deposit the payment in the bank branch accepting government payments.
The TDS deductions would required to be deposited in the Central Government Account via s Challan Form (Form No.26Q) within 7 days from the date of deduction is made. Delayed payments deposit in the Government account would be subject to interest payments.
Please ensure that the Sellers Pan Number is mentioned on the FORM very clearly and retain a copy of the Pan Card with you for your records.
A few developers offices have also begun to assist the Clients in this regard and they are depositing the same on behalf of the clients.
CEO – Mumbai Property Exchange.com