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Property TDS requirement goes online

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There will now be a tax deduction at source (TDS) for transfer of an immovable property. This new provision has come into effect from June 1, 2013 and it is important for every individual to understand the implications of this move and how they would actually be impacted when they go to purchase an immovable property. A look at several of the conditions related to this provision will ensure that there is a proper way in which the details are considered and this will also help in ensuring that the conditions related to the TDS are met and fulfilled.

 

Immovable property


The applicability of the provisions are a significant part of the process and for this purpose it is very clear that the new tax deduction at source will have to be made for immovable property. The term immovable property by itself ensures that various movable property like vehicles and other assets are excluded from the list. This will then broadly include land and house property and which is also an area where a lot of investments are taking place. There is one more specific exclusion present in the process and this is that of agricultural land so while other types of land will be included under the definition the agricultural land would be excluded. The starting point is thus such that only when there is an immovable property then the necessary TDS would have to be undertaken.

 

 Transferee to make TDS

 

The next question that arises in the process is about the responsibility for making the TDS. In this case this has been put squarely on the shoulders of the transferee. This means that the person who will get the ownership of the immovable property would have to fulfill the conditions. The person is the buyer who will actually make the necessary payment to the seller and then take the possession of the property. The buyer would have to make the TDS when the value of the transaction is over Rs 50 lakh so there is a built in provision for the protection of the small individual as they will not be covered. However another angle to the entire situation is that the prices of properties has risen so much in the last few years that even in smaller cities it is not surprising to find that the value of the property crosses the RS 50 lakh mark.

 

 No tax deduction at source number (TAN)

 

Usually complying with the requirements for the tax deduction at source is very complicated and involves a lot of procedures. This involves getting the tax deduction at source number (TAN) which is like a PAN for those who are actually deducting the tax. The tax that has been deducted has to be deposited with in the specified time and then a return has to be filed. In this case there is an online form for making the TDS payment. Details required for the form will include the PAN of both the parties, their addresses along with the address of the property and the amount of the tax. In this case there would be a situation wherein the TDS could be a one time action because there will be people who are not normally covered under these provisions but they have to make the deduction for this purpose. The requirement for TAN has been done away with and even the return filing process has been simplified so this should provide some relief for the individual. However for people who have never done this before it might seem to be a difficult task and they might require some professional help in completion of the process. The rate at which the deduction has to be made is important because this is fixed at 1 percent but if there is no submission of the PAN then this could have to be done at 20 percent. Knowing the details and the fine print is important so that there are no mistakes that are made when it is actually completed.

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