Sale of property of Rs 50 lakh or more involving multiple sellers, buyers to attract TDS
July 24th, 2024
Listen to this Article
The government on Tuesday said that one per cent TDS will be applicable for transfer of immovable property involving multiple sellers or buyers wherein the aggregate consideration is Rs 50 lakh or more.
NEW DELHI: : of one per cent will apply on sale of an immovable property valued at Rs 50 lakh and more, even if there are multiple buyers and sellers involved in the transaction. A clarification in this regard was provided by Finance Minister ,Nirmala Sitharaman ,in her Budget Speech amid cases of misinterpretation of tax provisions.
The government on Tuesday said that one per cent TDS will be applicable for transfer of immovable property involving multiple sellers or buyers wherein the aggregate consideration is Rs 50 lakh or more. The finance minister mentioned the applicability of Tax Deduction at Source (TDS) in her 2024-25 Budget speech.
In the budget document, the government said that Section 194-IA of the Act provides for deduction of tax on payment of consideration for transfer of certain immovable property other than agricultural land. An amendment will be made in the section to clarify this. "It is proposed to clarify that where there is more than one transferor or transferee in respect of an immovable property, then such consideration for transfer of the immovable property shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property," Finance Minister Nirmala Sitharaman said in her budget speech.
As per the law, a transferee (buyer) is responsible for deducting tax at source on the amount paid to a seller or transferor for transferring immovable property to the buyer/transferee. As per the budget document, Sub-section (1) of Section 194-IA provides that any person responsible for paying a resident any sum by way of consideration for transfer of any immovable property should at the time of credit or payment of such sum to the resident, deduct an amount equal to one per cent of such sum or the stamp duty value of such property, whichever is higher, as income-tax thereon. The sub-section (2) provides that no deduction of tax should be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, are both less than Rs 50 lakh.
"It has been observed that some taxpayers are interpreting that the consideration being paid or credited refers to each individual buyer's payment rather than the total consideration paid for the immovable property. "Hence if the buyer is paying less than Rs 50 lakh, no tax is being deducted, even if the value of the immovable property and stamp duty value exceeds Rs 50 lakh. This is against the intention of the legislature," the document said. Accordingly, the government has proposed to amend sub-section (2) of section 194-IA to clarify that where there is more than one transferor or transferee in respect of an immovable property, then such consideration shall be the aggregate of amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property.
The amendments will take effect from October 1, 2024.
Source: freepressjournal.in
Read all Thane Real Estate Latest News
To Know About Thane Real Estate Development Contact Us at 022 2580 6868
