I am buying an under-construction property which is already booked by a person in Bangalore. As per the process, I have to pay a token advance, sign an MoU, pay 10% of sale considerations, sign an assignment agreement with the builder, seller and go for sale deed registration (this will happen in July/August 2014). The total sale consideration of the property is ` 1.2 crore. At what stage should I deduct TDS from the sale consideration and give the TDS to the seller? The seller is clearing all the dues to the builder/developers prior to signing the agreement.
—Yateesh Kharbanda As per the recent amendment of the law, any person who buys a property has to deduct tax from the payments to be made to the seller at the rate of 1% of the sale consideration, in case the sale consideration exceeds ` 50 lakh. This has to be done either at the time of credit of the amount in the books or at the time of payment.
Since individuals do not maintain any books of accounts, they have to deduct tax at the rate of 1% at the time of payment. The tax so deducted has to be deposited with the government within seven days from the end of the month in which the payment for purchase of property is made. The payment has to be made in a special form number 26QB, which is a challan-cum-return.
The details of the above challans have to be filled online. The payment for the same can either be made online or offline in any bank. It is necessary to fill in the PAN details of the buyer and seller. In case you do not have PAN details of the seller, you will have to deduct tax at the rate of 20%.
The buyer has to issue a TDS certificate in Form No 16B within 15 days from the due date of filing the challan cum return. Preliminarily, you have to deduct the TDS as and when you pay to the seller. However, your matter seems complicated. So I would advise you to take the help of a professional chartered accountant. The payment has to be made through the website of NSDL. An e-tutorial on stepby-step guide for payment of TDS on property transaction is given on the following link https://www.tin-nsdl.com/ TDS/TDS-Introduction.php My wife is a homemaker who will take up a job later. Can I, in future, add her name to my home loan application. Can we pay both pay the bank and get tax benefits?
-Raman Singh It seems your wife is not a coowner of the property and has not contributed towards the cost of the flat. In that case, she cannot claim any tax benefits in respect of the home loan. In order to add her name as a property co-owner later, you will have to pay stamp duty and registration charges. It is not possible to add her name as a loan co-borrower later in the existing loan. However, if you still want to make her a co-borrower, you will have to foreclose the current loan where you are the sole owner and borrower, and file a fresh loan application.
If you have not yet purchased the property and availed the loan, you can still make your wife a co-owner and a co-borrower though she is not earning now, so that she can claim tax benefits once she starts earning. Harsh Roongta is CEO, Apna Paisa. He can be reached at firstname.lastname@example.org