Posted: 02 Mar 2013 12:06 AM PST
By Dr Sanjay Chaturvedi
Before announcing the 1% TDS on all transactions value above Rs.50 lakh, Finance Minister had said that ” Transactions in immovable properties are usually undervalued and underreported. One-half of the transactions do not carry the PAN of the parties concerned. With a view to improve the reporting of such transactions and the taxation of capital gains, I propose to apply TDS at the rate of one percent on the value of the transfer of immovable property where the consideration exceeds `50 lakhs.”
The black money issue is haunting the government and it seems that government is serious in curbing black money transaction in real estate deals. Last year the provisions were to be made applicable from October 2012 but was taken back.
A big procedural work is on the buyer who has to deduct the TDS and get TAN number , make returns and file and pay the TDS to government treasury. This is also applicable to TDR and second sale. Registrar cannot deny registration without the proof of payment of TDS.
The Finance Bill 2013-14 proposes levy of TDS at the rate of 1 percent on the value of the transfer of immovable property where the consideration exceeds Rs.50 lakh. However, agricultural land will be exempt. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram said that transactions in immovable properties are usually undervalued and under-reported. One half of the transactions do not carry the PAN of the parties concerned. The Finance Minister said that the proposal to apply TDS was aimed at improving the reporting of such transactions and the taxation of capital gains.