New TDS Rules for Property Sales: What You Need to Know
The government has clarified that a 1% TDS will apply on property sales over Rs 50 lakh, even with multiple buyers or sellers.
Property SalesTdsIncome TaxBudget 2024Real EstateReal EstateJul 23, 2024
If you're planning to sell your property worth over Rs 50 lakh, involving multiple buyers or sellers, you need to be aware of these changes. The government has clarified that where there is more than one transferor or transferee in respect of an immovable property, the consideration for the transfer shall be the aggregate of the amounts paid or payable by all transferees to all transferors for the property.
Previously, some taxpayers interpreted the consideration being paid or credited as referring to each individual buyer's payment rather than the total consideration paid for the property. This led to a situation where no tax was being deducted, even if the property's value and stamp duty exceeded Rs 50 lakh.
To address this, the government has proposed amending Sub-section (2) of Section 194-IA to clarify that the consideration shall be the aggregate amount paid or payable by all transferees to all transferors. This means that even if multiple buyers or sellers are involved, the total consideration paid for the property will be taken into account for TDS purposes.
The amendments will take effect from October 1, 2024, and will provide clarity on the TDS rules for property sales. It's essential for buyers and sellers to understand these changes to avoid any confusion or disputes.
The government's move is aimed at ensuring that tax is deducted at source on property transactions, and to prevent tax evasion. With the new rules in place, both buyers and sellers will need to be more diligent in their tax compliance.
Information
The Indian government's Budget 2024 document aims to promote economic growth and development, while also addressing issues related to tax evasion and compliance.
The Indian government is committed to promoting economic growth and development, while ensuring that tax laws are complied with. The Ministry of Finance is responsible for implementing tax policies and laws, including the Income Tax Act.
Frequently Asked Questions
What is the new TDS rule for property sales?
A 1% TDS will apply on property sales over Rs 50 lakh, even with multiple buyers or sellers.
When will the new TDS rules take effect?
The amendments will take effect from October 1, 2024.
What is the purpose of the new TDS rules?
The government's move is aimed at ensuring that tax is deducted at source on property transactions, and to prevent tax evasion.
Who is responsible for deducting tax at source?
The buyer (transferee) is responsible for deducting tax at source on the amount paid to the seller (transferor) for transferring the immovable property.
What is the consideration for TDS purposes?
The consideration for TDS purposes is the aggregate amount paid or payable by all transferees to all transferors for the property.
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