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Tds on property transfer

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  • 1. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 TDS ON PROPERTY BANGALORE Suite 920, Level 9, Raheja Towers, TRANSFER 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 VALLI ACCOUNTS DEPARTMENT EMAIL info@altacit.com WEBSITE www.altacit.com
  • 2. INTRODUCTION CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. TDS or best known as Tax Deducted at Tel: +91 - 44 - 2498 4821 BANGALORE Source is one of the modes of collecting Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Income-tax from the assessees in India. This Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 is governed under Indian Income Tax Act, COIMBATORE BB1, Park Avenue, # 48, Race Course Road, 1961, by the Central Board for Direct Taxes Coimbatore - 641018. Tel: +91 - 422 – 6552921 (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS), Ministry of Finance, Govt. of India. EMAIL info@altacit.com WEBSITE www.altacit.com
  • 3. OVERVIEW CHENNAI3rd Floor, ‘Creative Enclave’, • In simple terms, TDS is the amount of tax getting148-150, Luz Church Road, Mylapore, Chennai - 600 004. deducted from the person (Employee/Deductee) by the person paying (Employer/Deductor). This is Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, designed to make the tax administration more effective, furnishing of returns convenient, reduce 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE compliance cost and bring greater transparency. BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. • National Securities Depository Ltd. NSDL will be the Tel: +91 - 422 – 6552921 primary agency responsible for the design, implementation and maintenance of Tax Information Network (TIN) as per the requirements of Income Tax Department (ITD) EMAIL info@altacit.com WEBSITE www.altacit.com
  • 4. DEDUCTOR CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Under the process of TDS, Deductor is a Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, person/company who is liable to deduct the Tax at source, from the Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. payment being made to the party. Deductor is also termed as Employer in Tel: +91 - 422 – 6552921 cases where the payments are under Salaries. EMAIL info@altacit.com WEBSITE www.altacit.com
  • 5. DEDUCTEE CHENNAI Deductee is the person, from whom3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 the tax is being deducted or accrued for deduction. Depending on the BANGALORE Suite 920, Level 9, Raheja Towers, nature of the deduction being made, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, deductees and respective submission forms are categorized to 3 types Coimbatore - 641018. Tel: +91 - 422 – 6552921 1. Salaries: In case of salaries, the deductee is termed as an Employee. All the information of deductions and payments in this category should EMAIL be submitted in Form 24Q to the government. info@altacit.com WEBSITE www.altacit.com
  • 6. Contn.. CHENNAI 2.Non-Salaries - Resident:3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, In case of non-salaries and Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 the payment is made to a resident in India, the BANGALORE deductee is termed as a Deductee or a Party. All the Suite 920, Level 9, Raheja Towers, 26-27, M G Road, information of deductions and payments in this category should be submitted in Form 26Q to the Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, government. # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 3. Non-Salaries – Nonresident: In case of non-salaries and the payment is made to a non-resident of India, the deductee is termed as a Deductee or a Party. All the information of deductions and payments in this category should be submitted in Form 27Q to the EMAIL info@altacit.com government WEBSITE www.altacit.com
  • 7. TDS Certificates CHENNAI A tax deductor is also required to issue TDS3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, certificate to the deductee within specified Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, timed under section 203 of the I T Act. The certification from the deductor, for the Raheja Towers, 26-27, M G Road, Bangalore - 560 001. deduction and payment of the respective TDS Tel: +91 - 80 - 6546 2400 COIMBATORE amount to the bank, issued to the deductee is BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. a TDS certificate. The deductee should Tel: +91 - 422 – 6552921 produce the details of this certificate, during the regular assessment of income tax, to EMAIL adjust the amount of TDS against the Tax info@altacit.com payable by the Deductee WEBSITE www.altacit.com
  • 8. Types of TDS certificates CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Salaries - Form 16: In case of Salaries, the Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 certificate should be issued in FORM 16 BANGALORE Suite 920, Level 9, containing the Tax computation details and Raheja Towers, 26-27, M G Road, Bangalore - 560 001. the Tax deducted & Paid details. This refers to Tel: +91 - 80 - 6546 2400 COIMBATORE the details submitted over Form 24Q. Non-salaries - Form 16A: In case of Non- BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 Salaries, the certificate should be issued in FORM 16A containing the Tax deducted & Paid details. Separate certificates should be prepared for each Section [nature of EMAIL info@altacit.com payment]. This refers to the details submitted WEBSITE over Form 26Q and 27Q. www.altacit.com
  • 9. TDS on Transfer of property CHENNAI In order to ensure that the real estate3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 transactions come within the tax net, the Finance Bill presented along with BANGALORE Suite 920, Level 9, Raheja Towers, the Budget 2012 proposes to insert 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, new section 194LAA with effect from 01.10.2012 providing for TDS on Coimbatore - 641018. Tel: +91 - 422 – 6552921 transactions in immovable property (being land, building or any part of the EMAIL building). info@altacit.com WEBSITE www.altacit.com
  • 10. Contn… CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, As per the proposed section purchaser (or transferee) of an immovable property will Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, be required to deduct TDS @1% on the consideration paid or payable to resident Raheja Towers, 26-27, M G Road, Bangalore - 560 001. transferor for transfer of immovable Tel: +91 - 80 - 6546 2400 COIMBATORE property, i.e. land or building or part of a BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. building. The provisions do not apply if total Tel: +91 - 422 – 6552921 value of the consideration does not exceed Rs. 50 lakhs if the immovable property is situated in specified area and Rs. 20 lakhs in EMAIL info@altacit.com other cases. WEBSITE www.altacit.com
  • 11. Contn… CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • Specified area for this purpose means urban agglomeration of Greater Mumbai, Delhi, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Kolkata, Chennai, Hyderabad, Bengaluru, Ahmedabad and districts of Faridabad, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Gurgaon, Gautam Budh Nagar (NOIDA), Tel: +91 - 80 - 6546 2400 COIMBATORE Gaziabad, Gandhinagar and City of BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Secunderabad. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com
  • 12. Contn… CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • Purchase of Agricultural Land is excluded from the application of this provision, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, provided such agricultural land is situated beyond the specified distance from city limits Raheja Towers, 26-27, M G Road, Bangalore - 560 001. as provided for in section 2(14) of the Act. Tel: +91 - 80 - 6546 2400 COIMBATORE Therefore, agricultural lands situated within BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. such limits are covered by the TDS. It is also Tel: +91 - 422 – 6552921 mentioned that purchase and sale of land as part of stock in trade are also included for TDS. EMAIL info@altacit.com WEBSITE www.altacit.com
  • 13. Stamp Duty CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • The Bill also proposes that in case where stamp duty value adopted by the stamp duty Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, valuation authority is more than the apparent consideration the TDS is to be Raheja Towers, 26-27, M G Road, Bangalore - 560 001. calculated with reference to the stamp duty Tel: +91 - 80 - 6546 2400 COIMBATORE valuation. Further it is also provided that no BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. registering officer shall register any such Tel: +91 - 422 – 6552921 document, unless the transferee furnishes a proof of deduction of tax and its payment. EMAIL info@altacit.com WEBSITE www.altacit.com
  • 14. TDS Payment CHENNAI3rd Floor, ‘Creative Enclave’, • The TDS is required to be made either at the time148-150, Luz Church Road, Mylapore, Chennai - 600 004. of payment or credit of the seller whichever is Tel: +91 - 44 - 2498 4821 BANGALORE earlier. Advance payment of land is of land is Suite 920, Level 9, Raheja Towers, 26-27, M G Road, therefore also covered by the TDS provisions. While Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 this increase substantial compliance requirement COIMBATORE BB1, Park Avenue, for each of the purchaser of the immovable # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 properties, it is provided that a purchaser of property which otherwise does not have a Tax Deduction Number, need not to obtain the TAN only for deduction/payment of tax under this provision. therefore also covered by the TDS EMAIL info@altacit.com provisions WEBSITE www.altacit.com
  • 15. The new provision will be applicable CHENNAI w.e.f 1st October 2012 .3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • The above provisions not only will increase the Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 revenue of the Government but will also help the BANGALORE income tax department to collect the data with respect to sale and purchase of the immovable Suite 920, Level 9, Raheja Towers, 26-27, M G Road, properties. Seller of the said immovable property Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, will be required to comply with all the provisions Coimbatore - 641018. Tel: +91 - 422 – 6552921 of capital gains tax and also declare the relevant information in the annual income tax return failing which the same may be treated suppression of income and non-disclosure of the EMAIL facts. info@altacit.com WEBSITE www.altacit.com
  • 16. CHENNAI3rd Floor, ‘Creative Enclave’, • Purchaser need to be extra cautious and148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 must keep ready papers justifying source of BANGALORE income used for the purchase of such Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. immovable property and its disclosure in Tel: +91 - 80 - 6546 2400 the annual income tax return. Since proof COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. of deduction of tax has to be submitted at Tel: +91 - 422 – 6552921 the time of mutation with the registrar thus to avoid tax deduction at source is impossible. Invisible impact of this section is more than its visible impact. EMAIL info@altacit.com WEBSITE www.altacit.com
  • 17. Rollback of TDS on Property CHENNAI Transfer3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • New Delhi: The government rolled back the proposed one percent tax deduction Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, at source (TDS) on transfer of immovable property. Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, • Initiating the debate on the Finance Bill for # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 2012-13 in the Lok Sabha, Finance Minister Pranab Mukherjee said the government had decided to roll back the levy after receiving various EMAIL representations. info@altacit.com WEBSITE www.altacit.com
  • 18. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • The Finance Bill proposes that every transferee of immovable property (other Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, than agricultural land), at the time of making payment for transfer of the Raheja Towers, 26-27, M G Road, Bangalore - 560 001. property, shall deduct tax at the rate of 1 Tel: +91 - 80 - 6546 2400 COIMBATORE percent of such sum,” Mukherjee said. BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com
  • 19. CHENNAI3rd Floor, ‘Creative Enclave’, • In the budget for financial year 2012-13148-150, Luz Church Road, Mylapore, Chennai - 600 004. presented 16 March, the finance minister had Tel: +91 - 44 - 2498 4821 proposed to levy TDS on transfer of immovable BANGALORE Suite 920, Level 9, Raheja Towers, property, in a bid to tighten screw on corruption 26-27, M G Road, Bangalore - 560 001. and black money in the property markets. Tel: +91 - 80 - 6546 2400 COIMBATORE • I have received a number of representations BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. pointing out the additional compliance burden Tel: +91 - 422 – 6552921 this measure would impose. Therefore, propose to withdraw this provision for levy of TDS on transfer of immovable property. EMAIL info@altacit.com WEBSITE www.altacit.com
  • 20. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • However, industry body Confederation of Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 Indian Industry (CII) and experts had BANGALORE Suite 920, Level 9, Raheja Towers, criticised the move. The apex realty body 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 CREDAI too said that this would lead to COIMBATORE BB1, Park Avenue, increase in property prices. • Meanwhile, CII had said that the # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 government should remove tax deduction at source (TDS) norm for the bonds floated by companies in order to strengthen the EMAIL corporate bond market. info@altacit.com WEBSITE www.altacit.com
  • 21. CHENNAI3rd Floor, ‘Creative Enclave’, • Gujarat chief minister Narendra Modi has written148-150, Luz Church Road, Mylapore, Chennai - 600 004. to Prime Minister Manmohan Singh on another Tel: +91 - 44 - 2498 4821 issue related to “federalism”, this time on a BANGALORE Suite 920, Level 9, Raheja Towers, provision in the union budget. Modi’s letter states 26-27, M G Road, Bangalore - 560 001. that the proposal to impose 1% Tax Deducted at Tel: +91 - 80 - 6546 2400 COIMBATORE Source (TDS) on payment towards registration of BB1, Park Avenue, # 48, Race Course Road, immovable property will cause delays in the Coimbatore - 641018. Tel: +91 - 422 – 6552921 processing of documents, leading to adverse effects on the realisation of stamp duty on transactions, a domain of state governments. Modi sought the PM’s intervention to withdraw the EMAIL proposal which comes into effect from October 1, info@altacit.com 2012. WEBSITE www.altacit.com
  • 22. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • Since the proposed procedure involves Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 proof of deduction and payment of TDS, it BANGALORE Suite 920, Level 9, Raheja Towers, would complicate the entire procedure and 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 result in delayed processing for registration COIMBATORE BB1, Park Avenue, of the documents. Dealing with two # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 separate authorities for registration of documents would add to the problems,” states Modi’s letter. “Needless to say, it will affect the realisation of Stamp Duty, which EMAIL is an important part of the state’s info@altacit.com revenues.” WEBSITE www.altacit.com
  • 23. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, By taking all these consideration as of now Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Government Rolled back the Proposed TDS on Property Transfer. Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com
  • 24. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, THANK YOU Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com