In new financial year, start your tax planning from first day itself. In this regard if you are planning to invest in immovable properties then there is some compliance which must be followed. In case you miss out any compliance then your investment may attract interest and penalty for you. Be TAX AWARE while investing in Immovable Property.

1. Mandatory Filing

When any transaction for immovable property of Rs 50 Lakhs or more is being executed then-

• Tax @ 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration.

 

• Tax so deducted shall be required to be paid to the credit of the Central Government within a period of seven days from the end of the month in which the deduction is made. Payment should be deposited to the Government Account through e-tax Payment option (Net banking) or any of the authorised bank branches.

 

• PAN of seller as well as Purchaser should be mandatorily furnished in an online Form (Form 26QB) for furnishing information regarding the property transaction.

 

• TDS certificate in Form 16B is required to be issued by the Buyer of property to the Seller, in respect of the taxes deducted and deposited into the Government Account.

 

It is mandatory for all buyers to issue TDS certificates after generating and downloading the same from TRACES, “TDS Reconciliation Analysis and Correction Enabling System” (www.tdscpc.gov.in). The TDS Certificates downloaded only from TRACES Portal will hold valid.

 

2. Non/Late filing of TDS Statements (Form 26QB):

 

• For Buyer of Property: A fee shall be levied u/s 234E of the Act. He shall be liable to pay, by way of fee, a sum of Rs. 200 (two hundred) for every day during which such failure continues. The buyer would also be liable for defaults of Late Deduction, Late Payment and Interest thereon. Penalty under S. 271H may also be levied on him by the Assessing Officer.

 

• For Seller of Property: The TDS Credit not being available to the seller for claiming the amount of tax already deducted from the payments made.

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