TDS on realty buy is a must

Q I am a retired employee of a private organisation. I stopped filing since my retirement in 2012 as my income was below the taxable limit. I am now settled in Visakhapatnam and owning a house in other state. Now I want to sell the house for ` 90 lakhs and purchase land in AP. Is TDS applicable on sale? If yes, how much?

K. V. RAMANA Visakhapatnam

A) As per Section 194- IA of the Income- Tax Act, tax is required to be deducted at source at the rate of one per cent on the money paid for purchase of a residential house, if the consideration is ` 50 lakh or more. However, the tax will be deducted by the purchaser of the property on your behalf. You need to furnish your PAN so that you get the credit for the tax deducted on your behalf after the purchaser of immovable property files TDS return.

Q

For claiming deduction for rent paid under Section 80 GG, it is said that the tax payer should be either a self- employed or a salaried employee, who does not receive HRA. However, a pensionee may fall under the grey area as there are diferring opinions about the existence of employeremployee relation between the pensionee and his former employer. In such a scenario, can we consider pensionees as an employee who does not get HRA and claim deduction under Section 80GG? SANJANA Hyderabad

A) The following conditions should be satisfied in order to claim deduction under section 80GG : 1) The taxpayer is an individual.

2) The taxpayer is a self- employed person. Alternatively, the taxpayer is an employee but he does not get house rent allowance from the employer at any time during the previous year.

3) The following persons should not own any residential accommodation at the place where the taxpayer resides performs the duties of his office, or employment or carries on his business or professiona) The taxpayer; b) His/ her spouse; c) His/ her minor child ( including minor step child and minor adopted child); d) The Hindu undivided family of which the taxpayer is a member

4) If the taxpayer owns a residential accommodation other than the place noted above, then in respect of that house the concession in respect of self occupied property is not claimed by him [ under section 23( 2)( a) or 23( 4)( a)]

Amount of deduction - If the above four conditions are satisfied, the amount deductible under section 80GG is the least of the following threea) ` 5000 per month b) 25% of total income c) The excess of actual rent paid over 10 per cent of total income.

Hence, there should not be any problem in claiming deduction under section 80GG.