Indian real estate is considered to be one of the most widely used means to generate and park black money. Cash component in pot of land and property transactions/registrations could be as high as 60%.
According to a finance ministry official, " Property buyers will need to show income tax challan to get their property registered from October, 2012"
Finance Minister Mr. Pranab Mukherjee in the budget proposed 1% TDS by the buyer from the consideration paid to the seller if the value of the property is above Rs. 50 lakh in metro areas and above Rs. 20 lakh in rural and other places.
Sellers can claim credit in lieu of this on the basis of a one-page form to be notified soon after the passage of the Finance Bill.
The rule will cover all plot of land and house transactions, except farmland.
While the move is aimed at checking generation and use of black money by bringing most property deals under the radar of the IT (Inome Tax) department, tax experts say there could be a rush in property deals in the next 6 to 10 months to avoid hassles.
IT officials say the new rule will ensure a steady flow of information to the IT department on property deals.
Long-term capital gains tax is levied at the rate of 10%.
Src: ET
1% TDS..!
After imposing a 1% TDS (Tax Deduction at Source) on property transactions above a threshold, the central government plans to make it mandatory for people to show proof of this tax payment to get their properties registered.
According to a finance ministry official, " Property buyers will need to show income tax challan to get their property registered from October, 2012"
Finance Minister Mr. Pranab Mukherjee in the budget proposed 1% TDS by the buyer from the consideration paid to the seller if the value of the property is above Rs. 50 lakh in metro areas and above Rs. 20 lakh in rural and other places.
Sellers can claim credit in lieu of this on the basis of a one-page form to be notified soon after the passage of the Finance Bill.
The rule will cover all plot of land and house transactions, except farmland.
While the move is aimed at checking generation and use of black money by bringing most property deals under the radar of the IT (Inome Tax) department, tax experts say there could be a rush in property deals in the next 6 to 10 months to avoid hassles.
IT officials say the new rule will ensure a steady flow of information to the IT department on property deals.
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| Mr. Lalit Kumar Jain, President, CREDAI |
Affect Property Seller's Liquidity..!
Mr. Lalit Kumar Jain, President, Confederation of Real Estate Developers' Associations of India, (CREDAI) said, '' The buyer of a property will have to deduct the amount and submit it. It adds to the woes of the customer and administratively it is not a practical suggestion. It will affect the seller's liquidity as well because he will get a lower amount. Buyers will need to provide details about the property, themselves and the seller in the tax deduction form. For developers selling houses it would mean loss of opportunity & interest income.Long-term capital gains tax is levied at the rate of 10%.
Src: ET
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