Government to modify TDS norms on immovable property sale
Real Estate

Government to modify TDS norms on immovable property sale

At the time of buying property, 1% Tax deduction at source (TDS) will apply on a non-agriculture immovable property of more than Rs 50 lakh based on the sale price or the stamp duty value, whichever is higher, after a modification in the Income Tax Act.

Presently, the TDS is deducted on a basis, only on the consideration value of the immobile properties.There is an inconsistency in the Income Tax Act about the levy of Tax Deduction at Source (TDS). On Tuesday, Finance Minister Nirmala Sitharaman proposed the amendment to do away with the anomaly in the law.

According to the Finance Bill, 2022, introduced in Parliament along with the other Budget documents, the government offers to amend Section 194-IA of the Income Tax Act, to remove inconsistency with Section 43CA and 50CA of the law. This modification, if done, will take effect from April 1, 2022.

Describing the rationale behind the amendment, the Finance Bill said Section 194-IA of the Act renders for deduction of tax on payment on transfer of certain immovable property other than agricultural land.

The sub-section (1) provides for deduction of tax by any person responsible for paying to a resident any sum by way of consideration for transfer of any immovable property (other than agricultural land) at the time of credit or payment of such sum to the resident at the rate of 1% of such sum as income-tax thereon.

Sub-section (2) renders that no tax deduction should be made where the consideration for the transfer of immovable property is lower than Rs 50 lakh.

According to the requirements, TDS is to be deducted on the amount of consideration paid by the transferee to the transferor, the document said.This section does not consider the stamp duty price of the immovable property, whereas, as the conditions of section per 43CA and 50C of the Act, for the estimation of income under the head 'profits and gains from business or profession' and 'capital gains' respectively, the stamp duty value is also to be viewed.

Therefore, there is inconsistency in the rules of section 194-IA and sections 43CA and 50C of the Act. To remove inconsistency, it is offered to amend section 194-IA of the Act to render that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of 1% of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher.

Image Source

Also read: CREDAI asks for several tax sops to increase housing demand

At the time of buying property, 1% Tax deduction at source (TDS) will apply on a non-agriculture immovable property of more than Rs 50 lakh based on the sale price or the stamp duty value, whichever is higher, after a modification in the Income Tax Act. Presently, the TDS is deducted on a basis, only on the consideration value of the immobile properties.There is an inconsistency in the Income Tax Act about the levy of Tax Deduction at Source (TDS). On Tuesday, Finance Minister Nirmala Sitharaman proposed the amendment to do away with the anomaly in the law. According to the Finance Bill, 2022, introduced in Parliament along with the other Budget documents, the government offers to amend Section 194-IA of the Income Tax Act, to remove inconsistency with Section 43CA and 50CA of the law. This modification, if done, will take effect from April 1, 2022. Describing the rationale behind the amendment, the Finance Bill said Section 194-IA of the Act renders for deduction of tax on payment on transfer of certain immovable property other than agricultural land. The sub-section (1) provides for deduction of tax by any person responsible for paying to a resident any sum by way of consideration for transfer of any immovable property (other than agricultural land) at the time of credit or payment of such sum to the resident at the rate of 1% of such sum as income-tax thereon. Sub-section (2) renders that no tax deduction should be made where the consideration for the transfer of immovable property is lower than Rs 50 lakh. According to the requirements, TDS is to be deducted on the amount of consideration paid by the transferee to the transferor, the document said.This section does not consider the stamp duty price of the immovable property, whereas, as the conditions of section per 43CA and 50C of the Act, for the estimation of income under the head 'profits and gains from business or profession' and 'capital gains' respectively, the stamp duty value is also to be viewed. Therefore, there is inconsistency in the rules of section 194-IA and sections 43CA and 50C of the Act. To remove inconsistency, it is offered to amend section 194-IA of the Act to render that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of 1% of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher. Image Source Also read: CREDAI asks for several tax sops to increase housing demand

Next Story
Infrastructure Transport

Safety concerns arise over Mumbai's newly opened Coastal Road tunnel leaks

Two months after the opening of a section of Mumbai's Coastal Road tunnel to traffic on March 11, observations have been made of water leaks. It has been noted that water is seeping through the walls and ceiling, particularly at the southbound tunnel's end near Princess Street Flyover. Despite repairs made during testing, this issue continues. Leaks have been sighted on both sides of the walls in the southbound tunnel, with the slab above also appearing wet. The ongoing water leakage has resulted in the paint on the walls peeling off. The BMC is under scrutiny as it prepares to open another ..

Next Story
Infrastructure Urban

CM: 95% Smart City Project nears completion

Pramod Sawant, Chief Minister, Goa, stated that the Smart City work in Panaji is nearing completion, with approximately 95% of the tasks done. He mentioned that the deadline for finishing the work was May 31. Sawant further informed that Smart City MD and CEO Sanjit Rodrigues would be conducting an inspection within two days to assess the progress and ensure its completion. He added that the inspection would involve the participation of the mayor of the Corporation of the City of Panaji, Rohit Monserrate. Earlier in the year, there had been a visit by high court judges to Panaji aimed at und..

Next Story
Infrastructure Urban

10,200 saplings to be planted in Kovai, Coimbatore

The Coimbatore City Municipal Corporation (CCMC) announced the commencement of tree-planting operations across the five zones of the city. It was stated by the civic body that 265 locations, encompassing public parks and Open Space Reservation (OSR) lands, had been identified for this initiative. As part of the Green Tamil Nadu Mission project, CCMC Commissioner M Sivaguru Prabhakaran inaugurated the campaign on Monday near the Kurichi Housing Unit in the South Zone. It was disclosed that a total of 10,200 tree saplings are slated for planting. Various endeavors are underway to safeguard the..

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 81086 03000

Join us Telegram