TDS on Immovable Property to be deducted by buyer at 1%

Section 194IA, is effective from 01.06.2013.  Accordingly on sale of immovable property Buyer has to deduct TDS @1% and deposit the same with the income tax department.

Key Highlights of TDS on Immovable property are mentioned below:

• TDS is to be deducted by buyer @ 1% of value.
• TDS is to be deducted only if property value exceeds Rs 50 lacs.
• No TAN is required by buyer
• Only PAN no of Buyer and Seller is to be mentioned filing depositing TDS.
• TDS can be deposited online ,
• TDS deducted by the buyer at the time of making the payment to the seller has to be deposited within a period of 7 days from the end of the month in which the deduction has been made.
• Form 26QB has been prescribed for making such payment and the form for  doing the same has been uploaded on the following website of NSDL: https://onlineservices.tin.nsdl.com/etaxnew/tdsnontds.jsp
• Issue of TDS Certificate: The TDS Certificate shall be issued in Form 16B within 15 days from the due date of deposit.
• In case the PAN Card No. is not given by the buyer to the seller, TDS would be required to be deducted @ 20% under 206AA

How to apply PAN

Already as per current Income tax provision on purchase and sale of immovable property PAN no is compulsory if value exceeds Rs 5 lac. The reason for introducing section 194-IA is for widening of tax base and to check tax avoidance measures.

Currently, if buyer is purchasing property from NRI, then he has deduct TDS under section 195.

Major Challenges expected due this new Section on TDS on Immovable property

In case seller wants to save tax on capital gain under section section 54, by investing in immovable property then he has to claim income tax refund.

How to File Income tax return and avoid common Mistakes

ncome tax Return for Assessment year 2013-2014 has started.

Before filing income tax return, following things documents need to be arranged:

1) Form 16 from your employer, in case of Income Tax Return of Salary.

2) Interest Certificate (Form 16A) from Banks and Other Financcial institutions

3) Form 16A in case of Income Tax Return of professionals and contractors

4) Interest Certificate from Housing Loan Company.

5) Bank Statement for Interest Calculations. Please note from AY 2013-2014 (Saving Interest upto Rs 10000/-) is allowed as deduction from Total income under section 80TTA.

6) Investment Proof made under section 80C

7) Medical premium paid under section 80D

With Income tax return you are not required to attach any physical document. But it is advisable to keep these documents safely in your ITR file.

While Filing Income tax return following Common mistakes to be avoided.

1. Correct PAN no
2. Correct DOB
3. Correct Income tax forms. (Download Income tax forms ) Find out whether you have to use ITR 1 or ITR 2.
4. Correct bank account no and IFSC code.
5. View your form 26AS and ensure that TDS amount reflected in TDS certificate is reflected under 26AS.
6. If you have changed job during the year, make sure to include both form 16 in your total income tax return. Failure to include form 16 from previous employer may land you in trouble.
7. Show any gift received under section 56.
8. Show net salary in income form salary head.
9. Make sure to include interest income from saving account and Fixed deposits
10. Include income/ loss from share purchased or sold. Yes even if you have incurred capital loss, show this in yourincome tax return. This will help you to carry forward loss to next year and will be adjusted from income in next year.

After Income tax return is filed, make sure:

• To send ITR-V to the I-T department in 120 days. ITR V need to be send to —   Income Tax Department – CPC, Post Bag – 1, Electronic City Post Office,Bangalore – 560 100, Karnataka.
• Please send through speed post or ordinary post only.
• Make sure to sign the acknowledgement
• Check your registered email for acknowledgement of receipt of ITR-V.
• In case ITR V acknowledgement is not received from income tax deparment within 60 days, arrange to resend the ITR-V.

Need Assistance in Filing Income tax return, Contact us now.

Just upload your form 16/ or 16 A, make payment and relax. We will do all calculations and File Income tax Return or you. Visit here to file Income tax Return

Correct Income tax form for filing income tax return for year 2012-2013 (AY 2013-2014)

Who can use the ITR-1 Form for Previous Year 2012-2013 ( AY 2013-2014)

ITR–1 Form is to be used by an Individual having income from following sources:

• Income from Salary/ Pension
• Income from One House Property (not being brought forward losses from previous years)
• Income from Other Sources (not being income from lottery or race horses)

Moreover, in case any income of spouse, minor child, etc. gets clubbed with the income of the assessee, then ITR–1 can be used only if the clubbed income falls into the above income source.

Who cannot use the ITR–1 Form

ITR–1 Form should not be used by an Individual if his total income consists of:

• Income from more than one house property
• Income from Winnings from lottery or income from Race horses
• Income ( not exempt from tax) under Capital Gains
• Income exceeding Rs. 5,000 from agricultural business
• Income exceeding Rs. 5,000 from Exempt Income
• Income from Business or Profession
• Losses which has to be carried forward
• Person claiming relief of foreign tax paid under section 90, 90A or 91
• An individual who is a resident having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.

In these cases, Income tax Assessee has to use either ITR 2 or ITR4.

Visit here to download Income tax Form 1

Who can use ITR 2  for filing income tax return for Previous Year 2012-2013 ( AY 2013-2014) ?

ITR 2 is used by an individual or a Hindu Undivided Family whose total income comprises following income:

• Income from Salary / Pension
• Income from House Property
• Income from Capital Gains
• Income from Other Sources
• Income from Winning of Lottery
• Income from Race Horses

Moreover, if the income of spouse, minor child, etc. is to be clubbed with the income of the assessee, then ITR 2 can be used if such income falls in any of the above categories.

Who cannot use ITR 2 for Previous Year 2012-2013 ( AY 2013-2014) ?

ITR 2 is not used by

• An Individual/ HUFs if his total income includes any income taxable under the head “Profit or Gain from Business or Profession. In other words, business or professional income does not form the part of ITR-2.
• A Partnership Firm having exempt income by way of shares (& not earning any income by way of interest, salary, etc.).

Please note:

1. No documents are required to be affixed with any ITR Forms.
2. ITR Forms can be filed either manually or electronically, with or without digital signature, with the Income Tax Department.
3. For Assessment year 2013-2014, every person (not being a co.) to e-file (Electronic Income tax Return) the income tax return if its total income exceeds Rs. 5,00,000. While filing the return care should be taken to ensure that you select correct Income tax forms.

Need Assistance in Filing Income tax return, Contact us now.

Just upload your form 16/ or 16 A, make payment and relax. We will do all calculations and File Income tax Return or you. Visit here to file Online Income tax Return