By virtue of a fresh section 194LLA, tax is required to be deducted at source on sale of property. Section 194LLA has provision of TDS payment on transfer or sale of immovable properties except agricultural land in India. Applicability When a person transfers any immovable property, other than agricultural land then tax is required to be deducted at source by the transferee. TDS @1% by transferee Every transferee, while making payment or crediting any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall deduct tax, at the rate of 1% of such sum, if the consideration paid or payable for the transfer of such property exceeds â€“
- Rs. 50 lacsÂ in case such property is situated in a specified urban areas
- Rs. 20 lacs in case the property is situated in any other area.
TDS on Stamp Duty Valuation Where the consideration paid or payable for the transfer of an immovable property is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of transfer of such immovable property, the value so adopted or assessed or assessable shall, for the purposes of Tax at source, be deemed to be the consideration paid or payable for the transfer of such immovable property. Registration of transferred property only after proof of TDS The registration for transfer of immovable properties shall not be done unless the transferee provides proof of deduction and payment of Tax at source to the registering officer. The officer will not register the transfer unless documents provided. Relief to Transferee
- Simple Challan – Only one page challan for payment of TDS on sale of property would be prescribed containing details of both transferor and transferee (including PAN) and other details of the transferred property for reducing the compliance burden.
- No TAN – The assessee would not require any Tax Deduction and Collection Account Number (TAN) as this would be mostly a one time transaction.
Like any other pre-paid taxes, the transferor would get credit of TDS on the basis of information furnished by the transferee in the challan of payment of tax at source. This provision of TDS on Sale of Property will be effective from 1st October 2012.