Budget 2024: Now you can’t escape TDS on sale of house property of over Rs 50 lakh by splitting the sale value 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 legislature
Budget 2024 has said that now the aggregate amount paid for purchasing a house property will be considered for determining the limit for deduction of TDS on sale of house property.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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“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. Accordingly, it is proposed to amend sub-section (2) of section 194-IA of the Act 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 the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property,” as per Memorandum to Union Budget 2024.
“The Budget has clarified that TDS under Section 194-IA shall be applicable if the total sale consideration or stamp duty value of the immovable property exceeds Rs 50 lakh irrespective whether there are multiple buyers/ sellers of the immovable property and amount payable by the respective buyer or receivable by the respective seller does not exceed Rs 50 lakh,” says Shalini Jain, Tax Partner, People Advisory Services, EY India.
Jain from EY India further explains the concept with an example.
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More NewsFor example, if 2 buyers are purchasing an immovable property worth INR 80 lakh and each buyer will become 50% owner in the immovable property, then, both the buyers will be required to deduct TDS at 1% on the amount payable by them respectively even though amount payable by each buyer is Rs 40 lakh.
In some cases, it was observed that provisions of Section 194-IA were interpreted for each individual buyer’s payment liability. The budget now clarifies that total value of the immovable property needs to be seen for Section 194-IA applicability and not individual buyer’s payment liability.
What did Budget 2024 say
Sub-section (1) of the said section provides that any person responsible for paying to a resident any sum by way of consideration for transfer of any immovable property shall, 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. Sub-section (2) of the said section provides that no deduction of tax shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property,are both less than fifty lakh rupees.
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 amendments will take effect from the 1st day of October, 2024.
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This story originally appeared on: India Times - Author:Faqs of Insurances
