TDS on Property Sale Rolled Back by the FM The finance minister Pranab Mukherjee recently rolled back the 1% TDS proposal on immovable properties.The TDS on property sale was proposed by the government of India in the budget 2012-2013. The rollback of the TDS will make the buyer easily accessible for a property transaction. Earlier the entire procedure of the TDS was complicated as the buyer had to provide personal details along with the property details and mentioning of the seller in the tax deduction form. It was demanded by the CII that TDS should be removed in order to strengthen the corporate bond market. The TDS would have helped in keeping a track of the actual property value through which the tax can be paid and to make the tax administration more effective and bring greater transparency in a bid to reduce the usage of black money. At the starting of the year 2012 the government had issued 1% of TDS on property sales; In order to tighten the screws on black money in the real estate field. The TDS was issued on the transfer of all the immovable properties with a sale value exceeding above Rs.50 lakh in urban cities and other rural areas with a property value of Rs.20 lakh. This rule was implied in order to deter the generation and the use of the unaccounted money in real estate. Other than agricultural land, all the immovable properties were covered in this provision. The TDS rule was implied stating that none of the transferable properties will be registered if the buyer does not have a proof of deduction and payment of the TDS. Implying TDS was one of the best ways for the government to collect more information about the value of the property transactions in the country. The role of TDS to remove the black money from the real estate market may not be acceptable to certain people. Perhaps the rollout of the TDS by the government has been
revolted by few of the officials and the people dealing with black money, as this would lead to an increase in the property prices and decrease in the involvement of black money.
Under section 203 of the IT act, the tax deductor is required to issue the TDS certificate to the deductee within the speculated time period. There are two types of TDS certificates; People who hold salaries are issued with a salaries form-16 which contains the tax computation details and the paid and the tax deducted details. Another type of a TDS certificate is for people without salaries who are given the form16A certificate. It also has same features like that of the salaried forms but a separate certificate has to be issued based on the nature of the payment. Apparently, there are increased chances of government bringing in the activation of the TDS by 1% as the rollback of the TDS has led to innumerable changes like the increase in property price, activation of black money and non-transparency of the value of properties. Perhaps, the government may consider re-enforcing the law again in future. Read More: Union Budget 2012 Impact on Real Estate in India
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