Budget 2012: Pranab Mukherjee proposes TDS for purchasing immovable property

Purchasing an immovable property generally involves running from pillar to post. Now, a home buyer (and seller) will need to run to the bank to deposit TDS. The FM has proposed TDS on transfer of immovable properties (other than agricultural land) at the rate of 1% where the sale consideration exceeds the specified threshold. The threshold is an amount of over Rs 50 lakh in an urban area and Rs 20 lakh elsewhere. This has been done to collect tax at the earliest point and also to have a reporting mechanism of transactions. For better compliance, it is also proposed that a registering officer will not register the transfer of any immovable property where taxes are required to be deducted unless the buyer furnishes proof of deduction and payment of TDS. For reducing the compliance burden on the buyer, a simple one-page challan for payment of TDS is proposed. This amendment will take effect from October 1. Source: http://economictimes.indiatimes.com/markets/real-estate/news-/budget-2012-pranab-mukherjee-proposes-tds-for-purchasing-immovable-property/articleshow/12302700.cms