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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Chennai > TDS on immovable property
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Old May 1 2013, 11:10 PM   #1
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Default TDS on immovable property

Hi Seniors,


Please let me know the procedure for TDS deduction and payment to government, for immovable properties purchase > 50 lakhs, as finance act has been passed already.

I understand that TAN is not required as per finance act passed. But, how one can remit TDS deducted to government without TAN. TDS deducted, but not remitted to government is a serious offense.

Also, please let me know whether we need to submit any proofs related to TDS deduction and remittance to SRO for registration of property when it is individual house or land purchase.


Thanks
 
Old May 1 2013, 11:32 PM   #2
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PROPOSED

The difficulty that a buyer may face to implement this TDS provision will be as under:
1. Obtaining TAN number for complying with the provisions;
1. Issuance of TDS certificate to the seller;
3. Filing of TDS return quarterly and mention PAN of the seller;
4. Taxes needs to be deposited within the specified time limit with the Government and may be scrutinized by the TDS officer

PASSED

1. No need to obtain TAN by Buyers to comply with the provisions and can simply buy immovable properties more than 50 lacs and get registered through SRO
2. Should deduct 1% TDS by buyers who pays amount to sellers compulsorily
3. May report to IT dept about such deduction

Hence buyers need not have TAN but must deduct TDS@1% compulsorily and then register the property is the essence

REPLY REQUESTED BY MEMBERS

Hi Seniors,

Please let me know the procedure for TDS deduction and payment to government, for immovable properties purchase > 50 lakhs, as finance act has been passed already.

I understand that TAN is not required as per finance act passed. But, how one can remit TDS deducted to government without TAN. TDS deducted, but not remitted to government is a serious offense.

Also, please let me know whether we need to submit any proofs related to TDS deduction and remittance to SRO for registration of property when it is individual house or land purchase.

[/JUSTIFY]
Thanks[/QUOTE]
 
Old May 1 2013, 11:40 PM   #3
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Quote:
Originally Posted by RaviCbe View Post
PEOPOSED

The difficulty that a buyer may face to implement this TDS provision will be as under:
1. Obtaining TAN number for complying with the provisions;
1. Issuance of TDS certificate to the seller;
3. Filing of TDS return quarterly and mention PAN of the seller;
4. Taxes needs to be deposited within the specified time limit with the Government and may be scrutinized by the TDS officer

PASSED

1. No need to obtain TAN by Buyers to comply with the provisions and can simply buy immovable properties more than 50 lacs and get registered through SRO
2. Should deduct 1% TDS by buyers who pays amount to sellers compulsorily
3. May report to IT dept about such deduction
Very nicely put Ravi!
 
Old May 1 2013, 11:51 PM   #4
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So RE is back to square one as long as the transaction value is lower than 30 lacs and below 50 lacs

That is if transaction is lower than 30 lacs , SRO will not report to IT and below 50 lacs means , SRO will report for which buyer need to inform the seller details and TDS deducted like how banks deduct 1% TDS for PAN CARD holders and report to IT

Hence the Budget passed for 40 lacs loan and increased exemption and ST exemption for 630 sqft carpet area will have more meaningfull way in the Project execution with better cash flow and will eventually bring out AFFORDABLE HOUSING proposed in the budget with More employment before impending Election while Petrol price is constantly coming down to match with diesel price besides blessing crude and Gold rate to ease inflation and bring down CAD to the level of 2.5-3 % as perceived by Montek .

Good electioneering year ahead .

Quote:
Originally Posted by vettipayyan View Post
Very nicely put Ravi!
 
Old May 2 2013, 01:25 AM   #5
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Hi Ravicbe,

Thanks for the detailed and valuable input. But, still one doubt remains unanswered - How a person can remit the TDS to government, if there is no TAN. Definitely nobody can hold the money without remitting to Govt. Request clarification on this point.
 
Old May 2 2013, 11:11 AM   #6
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http://law.incometaxindia.gov.in/dit...anitns-281.pdf

May be used temporarily until full guidelines are proposed as such.

TDS collected must be paid to Govt by using the 281 challan as of now and Govt may propose new challah to effect such payment through bank

TDS collected need not be shown to SRO and SRO is delinked totally as it is a central Govt subject
 
Old May 3 2013, 01:11 PM   #7
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Quote:
Originally Posted by RaviCbe View Post
PROPOSED

The difficulty that a buyer may face to implement this TDS provision will be as under:
1. Obtaining TAN number for complying with the provisions;
1. Issuance of TDS certificate to the seller;
3. Filing of TDS return quarterly and mention PAN of the seller;
4. Taxes needs to be deposited within the specified time limit with the Government and may be scrutinized by the TDS officer

PASSED

1. No need to obtain TAN by Buyers to comply with the provisions and can simply buy immovable properties more than 50 lacs and get registered through SRO
2. Should deduct 1% TDS by buyers who pays amount to sellers compulsorily
3. May report to IT dept about such deduction

Hence buyers need not have TAN but must deduct TDS@1% compulsorily and then register the property is the essence

REPLY REQUESTED BY MEMBERS

Hi Seniors,

Please let me know the procedure for TDS deduction and payment to government, for immovable properties purchase > 50 lakhs, as finance act has been passed already.

I understand that TAN is not required as per finance act passed. But, how one can remit TDS deducted to government without TAN. TDS deducted, but not remitted to government is a serious offense.

Also, please let me know whether we need to submit any proofs related to TDS deduction and remittance to SRO for registration of property when it is individual house or land purchase.

[/JUSTIFY]
Thanks
[/QUOTE]
Ministry of Finance is yet to release rules regarding TDS without TAN for sale of immovable property above Rs. 50 lakhs. It is expected soon.
 
Old May 4 2013, 01:39 AM   #8
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Thanks Ravicbe and Radnats for the clarification. Lets hope the new procedure is workable.
 
Old May 4 2013, 08:46 AM   #9
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Dear friends, I have gone through the posts in this thread, but am still not clear about one aspect and that is the date from which this TDS rule becomes effective. For example some one has already completed a sale of property exceeding 50 lacs before the bill was passed and no TDS has been made. What will be done in this case? Will be grateful for clarification. Further, if some one is buying a property exceeding Rs 50 lakhs value from a registered builder, will he have to deduct 1% tax from the gross payment and deposit it with the govt? What if he has purchased the property still under construction in resale where 95 % payment has already been made to builder. In this case how to deduct 1% of the total sale / purchase value? I will be grateful for clarifications on these issues. Thanks.
 
Old May 4 2013, 06:05 PM   #10
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It is applicable for the transaction w.e.f 01.06.2013 only for above 50 lacs transaction.

Make sure that you register at 49,99,999 Rs if the purchasing price is close to that 50 lacs with few thousand Rs difference

After all BATA sell all chappals and shoes with 99.90 or 999 Rs like other FMCG vendors .

Quote:
Originally Posted by Krishbharti View Post
Dear friends, I have gone through the posts in this thread, but am still not clear about one aspect and that is the date from which this TDS rule becomes effective. For example some one has already completed a sale of property exceeding 50 lacs before the bill was passed and no TDS has been made. What will be done in this case? Will be grateful for clarification. Further, if some one is buying a property exceeding Rs 50 lakhs value from a registered builder, will he have to deduct 1% tax from the gross payment and deposit it with the govt? What if he has purchased the property still under construction in resale where 95 % payment has already been made to builder. In this case how to deduct 1% of the total sale / purchase value? I will be grateful for clarifications on these issues. Thanks.
 
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