North India Statesman
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Tax Notice: Many taxpayers, especially home buyers, are saying on social media that they have received notices from the Income Tax Department regarding underpayment of TDS. These home buyers are also being asked to deposit the remaining TDS (including interest), which is approximately 20% of the value of the property purchased by them.
According to income tax rules, if the price of the property is Rs 50 lakh or more, then home buyers will have to pay 1 percent TDS. In case of absence of PAN number, TDS becomes 20 percent. Also, if the PAN number is not linked to Aadhaar, the PAN will no longer work. In fact, many home buyers have not linked their PAN number with Aadhaar and are receiving notices.
TDS on purchase of property
Suresh Surana, founder, tax consultancy RSM India, said, 'As per Section 194IA of the Income Tax Act, 1961, if the property price or stamp duty value exceeds Rs 50 lakh, 1% tax has to be paid. Payments from sellers to home buyers were cut. will be.' If the price of the property is Rs 75 lakh, then the home buyer will have to deduct 1% i.e. Rs 75,000 and pay the remaining Rs 74.25 lakh to the seller. The home buyer will have to deposit this amount to the Income Tax Department within 30 days. The seller can adjust this amount in his income tax liability while filing the return.
TDS if PAN and Aadhaar are not linked
According to the rules, more TDS should be deducted if there is no PAN card. Surana said, 'If the seller of the property has not given PAN or the buyer of the house has not given PAN, then tax will be deducted at the rate of 20 percent.' Additionally, according to the CBDT circular, if a person has not linked his Aadhaar and PAN by June 30, 2023, the PAN card will not work from July 1, 2023. Rates will apply.
Problem regarding notice time also
What if the buyer has deducted 1% TDS and paid the remaining 99% amount to the seller before issuing the notice? According to the Income Tax Act, if TDS rules are not followed, the home buyer instead of the seller will have to pay the penalty and interest rate. Surana said, 'It is the responsibility of the home buyer to ensure whether the seller's PAN number is linked to Aadhaar or not. If he fails to do so and deducts less TDS, the buyer will be responsible for the same.
He said, 'Home buyers who have not been able to deduct tax at the rate of 20 per cent and have received the notice will have to deposit the remaining amount. Apart from this, interest at the rate of 1% per month will also be charged on the outstanding amount of TDS. However, home buyers can demand an additional 19% TDS from the seller.
What should home buyers do?
First of all you should check the PAN number of the seller online. When you check the seller name, date of birth and mobile, OTP will be sent to the seller mobile for verification. As soon as you enter the OTP, you will know through the website whether the PAN number is active or not. Additionally, if you are a home buyer, you have received a notice for not deducting correct TDS and you can prove that you were not aware of the rule for deducting excess TDS, you can also appeal to the Income Tax Tribunal. Can do.
