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National: Property sellers without PAN to bear 20% TDS

In order to put a check on sale of immovable properties without disclosure of permanent account number ( PAN), the government has come up with a new rule. As per this new rule which came into effect from June 1st, 2013, sellers of immovable property will pay 20% tax deduction at source (TDS) on transactions done without disclosing PAN number.

 

Buyers of such property except agricultural land, will be required to pay TDS of 1% of the deal size for transactions above Rs 50 lakh. Buyers will have to pay 1% TDS electronically by filling a form online by visiting I-T department’s website. Those who don’t have access to internet get an option to fill the form and deposit the tax amount in an authorized bank branch.

 

According to an Income Tax (I-T) department official, notification of this proposal which was announced in the Budget session was given on May 31st. The government has taken this step to curb circulation of black money for real estate sector is considered to be a major source of generating black money. Officials are hoping that this new rule will help I-T department to have knowledge of some part of cash economy.

 

An official stated that, “The buyer, who deposits the amount, can generate the TDS certificate from department’s website and provide it to the seller. The seller would also be able to see the TDS credit in his statement.”

 

Favista’s Views: Making TDS mandatory for transactions without PAN is a good move by government. It will help country’s economy for through this government can put a check on black money and can increase its profits generated from taxes. Real estate investment has many tax benefits too if done in a proper way. Click on the link to know these benefits. http://www.favista.com/cms/blogs/2013/02/04/tax-benefits-on-investment-made-in-realty-market

About Sanjit Sharma

Sr. Online Marketing Executive with Favista Real Estate Pvt. Ltd.
This entry was posted in Budget 2013, Investment, Newsletter. Bookmark the permalink.

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