That the government is serious to plug the tax-porous realty market has come become clear with the Central Board of Direct Taxes notifying that all property deals worth Rs 50 lakh and about will have to notified to the taxmen by the seller.
Following this the buyer of a property will now have to deduct tax at the rate of 1 per cent while making payment to the seller if the cost of the immovable property exceeds Rs 50 lakh.It can be noted that the Finance Act 2013 had provided that purchaser of an immovable property (other than agricultural land) worth over Rs 50 lakh is required to pay withholding tax at the rate of 1 per cent from the consideration payable to a resident transferor. The rate at which tax is to be cut is 1 percent, but it would go up to as high as 20 per cent if the seller does not disclose his permanent account number. The payment has to be made online too but one does not have the facility to pay tax online, one can take the printout of the duly filled form and make payment on any authorised branch.
The provision will apply even when the property has been financed through a bank loan. Buyer will have to ensure either he himself or the bank deducts tax before disbursing the loan to the seller.
