Tds on property transfer

CHENNAI
3rd 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

INTRODUCTION
CHENNAI

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
Tel: +91 - 80 - 6546 2400 is governed under Indian Income Tax Act,
COIMBATORE
BB1, Park Avenue,
1961, by the Central Board for Direct Taxes
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

OVERVIEW
CHENNAI
• In simple terms, TDS is the amount of tax getting
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,
Tel: +91 - 80 - 6546 2400

COIMBATORE compliance cost and bring greater transparency.
BB1, Park Avenue,
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

DEDUCTOR
CHENNAI

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
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue,
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

DEDUCTEE
CHENNAI

Deductee is the person, from whom

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,
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue,
deductees and respective submission
forms are categorized to 3 types
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

Contn..
CHENNAI

2.Non-Salaries - Resident:

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
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue, government.
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

TDS Certificates
CHENNAI

A tax deductor is also required to issue TDS


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,

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,

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

Types of TDS certificates
CHENNAI

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,
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,
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

TDS on Transfer of property
CHENNAI

In order to ensure that the real estate

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,
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue,
new section 194LAA with effect from
01.10.2012 providing for TDS on
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

Contn…
CHENNAI

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,

transferor for transfer of immovable
Tel: +91 - 80 - 6546 2400

COIMBATORE

property, i.e. land or building or part of a
BB1, Park Avenue,

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

Contn…

CHENNAI

• 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,

Gurgaon, Gautam Budh Nagar (NOIDA),
Tel: +91 - 80 - 6546 2400

COIMBATORE

Gaziabad, Gandhinagar and City of
BB1, Park Avenue,

Secunderabad.
Tel: +91 - 422 – 6552921

EMAIL
info@altacit.com
WEBSITE
www.altacit.com

Contn…
CHENNAI

• 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,

as provided for in section 2(14) of the Act.
Tel: +91 - 80 - 6546 2400

COIMBATORE

Therefore, agricultural lands situated within
BB1, Park Avenue,

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

Stamp Duty
CHENNAI

• 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,

calculated with reference to the stamp duty
Tel: +91 - 80 - 6546 2400

COIMBATORE

valuation. Further it is also provided that no
BB1, Park Avenue,

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

TDS Payment
CHENNAI
• The TDS is required to be made either at the time
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
Tel: +91 - 80 - 6546 2400 this increase substantial compliance requirement
COIMBATORE
BB1, Park Avenue,
for each of the purchaser of the immovable
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

The new provision will be applicable

CHENNAI
w.e.f 1st October 2012 .

• 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
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue,
will be required to comply with all the provisions
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

CHENNAI
• Purchaser need to be extra cautious and
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,
immovable property and its disclosure in
Tel: +91 - 80 - 6546 2400
the annual income tax return. Since proof
COIMBATORE
BB1, Park Avenue,
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

Rollback of TDS on Property
CHENNAI
Transfer

• 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,
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue,
• Initiating the debate on the Finance Bill for
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

CHENNAI

• 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,

property, shall deduct tax at the rate of 1
Tel: +91 - 80 - 6546 2400

COIMBATORE

percent of such sum,” Mukherjee said.
BB1, Park Avenue,
Tel: +91 - 422 – 6552921

EMAIL
info@altacit.com
WEBSITE
www.altacit.com

CHENNAI
3rd Floor, ‘Creative Enclave’, • In the budget for financial year 2012-13
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,
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

CHENNAI

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,
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
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

CHENNAI
3rd Floor, ‘Creative Enclave’, • Gujarat chief minister Narendra Modi has written
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
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

CHENNAI

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,
Tel: +91 - 80 - 6546 2400
result in delayed processing for registration
COIMBATORE
BB1, Park Avenue,
of the documents. Dealing with two
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

CHENNAI


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,
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue,
Tel: +91 - 422 – 6552921

EMAIL
info@altacit.com
WEBSITE
www.altacit.com

CHENNAI

Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821

BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Tel: +91 - 80 - 6546 2400

COIMBATORE
BB1, Park Avenue,
THANK YOU
Tel: +91 - 422 – 6552921

EMAIL
info@altacit.com
WEBSITE
www.altacit.com

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