Owning of Property in India has a sentimental value in addition to the financial value. So, amidst the sentimental gush of being an owner of a house do not forget to comply with the tax laws associated with the property deals.
WHAT THE LAW SAYS
Section 194-IA of the Income Tax Act lays down that when a buyer buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50 lakhs, he has to deduct TDS when he pays to the seller.
COVENANTS OF SELLER & BUYER
What a buyer needs to do:
- Deduct tax @ 1% from the sale consideration.
- Collect the Permanent Account Number (PAN) of the Seller and verify the same with the Original PAN card.
- PAN of the seller, as well as Purchaser, should be mandatorily furnished in the online Form for furnishing information regarding the sale transaction.
- Do not commit any error in quoting the PAN or other details in the online form as there is no online mechanism for rectification of errors. For the purpose of rectification, you are required to contact the Income Tax Department.
What a seller needs to do:
- Provide the PAN to the Purchaser for furnishing information regarding TDS to the Income Tax Department.
- Verify deposit of taxes deducted by the Purchaser in your Form 26AS Annual Tax Statement
The TDS amount deducted has to be deposited with the government within seven (7) days from the end of the month in which deduction is made. Otherwise, interest must also be paid on delay.
HOW TO MAKE THE PAYMENT
Payment for TDS is made online only. This is done by an online payment challan available on the TIN NSDL website for electronically depositing TDS in form 26QB.
Delay in filling or submission of the form not only invites notice but also attracts a penalty of Rs 200 per day. So make sure to do the needful and avoid any troubles.
THE BOTTOM LINE
Paying attention to the above-mentioned things can save you from the tax notice. However, this does not mean that this is a universal solution to every situation. Under special circumstances, it is better to seek help from a professional and avoid yourself from unnecessary hassle.
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