Things to know before buying new property
There is a bit of work that a buyer would need to take when they buy a house property and this relates to the process of paying taxes.
There is a bit of work that a buyer would need to take when they buy a house property and this relates to the process of paying taxes. While capital gains tax is present at the time of the sale of the property and this is a calculation that would be influenced by the cost price that is paid at the current juncture there is also another provision of tax deducted at source that will come into the picture. Many people do not have an idea of this provision because they do not regularly buy and sell property and hence this is something that needs to be taken into consideration. Here is a closer look at the applicable conditions that need to be followed.
The whole purpose of introducing the element of tax deducted at source in a property transaction is that a lot of them actually escape the attention of the tax authorities. Many of these are carried out in cash and there is often no permanent account number that is present when the deal is registered. This actually leads to the transaction slipping through the tax net and hence to avoid this the tax department has come up with the proposal of the deduction and this becomes an important thing to follow.
The basic condition that is applicable for the property transactions is that if this has taken place after June 1, 2013 then there would have to be a tax deducted on source if the consideration of the property exceeds Rs 50 lakh. This is meant to ensure that smaller properties remain out of the tax net and that larger sales are recorded and there is no tax avoidance especially when it comes to under reporting too. Once the details of the property are present then the tax department can ensure that they take a closer look at the entire deal and the valuation so that if there is a problem then this can be tackled.
The TDS has to be undertaken by the buyer of the property and not the seller so it becomes the responsibility of the buyer to ensure that they complete the process when the transaction is being completed. There is another condition that they will have to fulfil which is that once the tax is deducted from the seller then the amount has to be deposited with the government. This is important to complete the transaction and hence this is required as per the procedures. There could have been a problem for the buyer since they do not have a tax deducted at source number but there is an exemption that is given for such purchases because these are one time purchases and hence in such cases the tax can be deposited after the usage of the PAN is done. This saves a lot of trouble because the individual does not need to go and take a TAN just for the purpose of a single transaction.
There are several other details that are important in the whole process. The first is that the TDS has to be deposited with the government within a period of seven days from the end of the month in which the TDS has been deducted. This gives some time to the buyer to ensure that they complete this part of the transaction. One can make the payment online too but one needs to be careful to ensure that there is a proper way in which the details related to the transaction are entered. There is also the facility of making the payment online when the details are filed and in the end the buyer has to give the TDS certificate to the seller of the property and this can be downloaded from the income tax website.