Monday, June 3, 2013

TDS on transfer of certain immovable properties (other than agricultural land) for value exceeding Rs. 50 Lakh

With effect from 1st June, 2013, a purchaser of an immovable property (other than agricultural land) worth over Rs. 50 lakhs is required to pay TDS @1% from the total consideration payable to a resident transferor. 

The rate of TDS will be 20% in case of non availability of PAN as there is a statutory requirement under section 139A of the Income-tax Act (read with rule 114B of the Income-tax Rules, 1962) to quote Permanent Account Number (PAN) in documents pertaining to purchase or sale of immovable property for value of Rs. 5 lakhs or more.
TDS on consideration paid to transferor of an immovable property will fall under a newly inserted section 194-IA of the Income Tax Act, 1961.

It is provided that a simple one page challan for payment of TDS would be provided containing the following details:
  1. Permanent Account No. (PAN) of Transferee(Payer/Buyer)
  2. Permanent Account No. (PAN) of Transferor (Payee/Seller)
  3. Category of PAN of Transferee
  4. Category of PAN of Transferor
  5. Full Name of the Transferee
  6. Full Name of the Transferor
  7. Complete Address of the Transferee
  8. Complete Address of the Transferor
  9. Complete Address of the Property Transferred
  10. Details of amount paid/Credited
  11. Tax Deposit Details

The transferee would not be required to obtain any Tax Deduction and Collection Account Number (TAN) or to furnish any TDS statement as this would be mostly a one-time transaction.  The transferor would get credit of TDS like any other pre-paid taxes on the basis of information furnished by the transferee in the TDS challan.