TDS on purchase of Immovable Property above Rs 50 Lakh

 TDS on purchase of Immovable Property above Rs 50 Lakh imagesThis year Finance Act, 2013 has imposed a new tax deducted at source on purchasing an immovable property (other than agricultural land) costing more than Rs.50 lakh u/s 194-IA. This tax will be called as withholding tax and the rate at which the tax is to be deducted is 1%. This amendment would be applicable from 1st June, 2013. Disclose your Permanent Account Number (PAN): If the seller of an immovable property (other than an agricultural land)has not disclosed his PAN then tax will be cut up to as high as 20%. Section 139A read with rule 114B of the Income Tax Act has already contained a provision to disclose PAN for sale of immovable property more than Rs.5 Lakh. After section 194-IA of the Income Tax, the following section shall be inserted with effect from the 1st day of June, 2013, namely- 1) Any person , being a transferee, responsible for paying to a resident transferor any sum by way of consideration for transfer of any immovable property(other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income tax thereon. 2) No tax deduction shall be made where the consideration for the transfer of an immovable property is less than Rs.50 lakh. Points to be noted: (i) “agricultural land” means agricultural land in India, not being a land situate in any other area. (ii) “Immovable property” means any land (other than agricultural land) or any building or part of a building.