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Smart & Easy TDS Software for Preparing TDS Returns

TDSMAN Blog - Smart & Easy TDS Software for Preparing TDS Returns

How to handle TDS on sale of property

Since June 2013, it has been mandatory for buyers of immovable property to deduct TDS from the amount to be paid to the seller. It is the responsibility of the buyer to deduct TDS if the transaction value exceeds Rs. 50 lakh. The buyer is required to deduct TDS @ 1% on the total consideration and deposit the same in the account of the income tax authorities in the prescribed format.

Form

Form 26QB must be filled by the buyer either online or offline to deposit the TDS. One can click the following link to access the form online.

https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Due date for filing

The challan (Form 26QB) must be filed within 7 days from the month in which the TDS was deducted by the buyer.

Details

Information with respect to the buyer and seller (name, address, PAN, status), details of the property, consideration and TDS payable must be entered in the form.

Payment

One can choose to pay either through Netbanking or at the branch of the bank. If the taxpayer chooses e-tax payment on subsequent date at the bank branch, an acknowledgement number is generated. This number must be retained by the taxpayer to be presented to the bank while making the payment.

Process

Once the form is filed and payment made to the income tax authorities, approved form 26QB or form 16B can be downloaded by logging into TRACES as a tax payer. Form 16B must be provided by the buyer to the seller as a proof of deposit of TDS.

Points to note

  1. Dealings in agricultural land are excluded from the requirements of these provisions.
  2. If the consideration is being paid in installments, TDS must also be deducted on each installment.
  3. If PAN is not provided by the seller, TDS @ 20% is deductible.

Source: The Economic Times

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Where TDS is applicable and how to avoid it

Salary income: Employer deducts TDS on total income, including income other than salary after taking into account all deductions and exemptions. This saves the individual the hassle of paying tax himself.

TDS rate: As applicable to individual based on his income and deductions.

Interest income: TDS is deducted by banks on FDs and RDs if the interest exceeds Rs 10,000 a year. TDS does not end tax liability. Someone in a higher tax slab will need to pay additional tax. Those in lower income bracket can seek a tax refund.

TDS rate: If PAN has been provided, TDS is 10% of income. Otherwise it is 20% of income.

EPF withdrawals: Withdrawals from Employee Provident Fund are subject to TDS if you withdraw before five years of service. However, no TDS is deducted on withdrawals of less than Rs 30,000.

TDS rate: If PAN has been provided, TDS is 10% of the withdrawal. Otherwise it is 20% of the amount.

Property sale: TDS is applicable if the value of the property exceeds Rs 50 lakh. If instalments are being paid TDS is deducted on each instalment. The buyer must obtain a Tax Deduction Account Number to deduct TDS. TDS has to be de -posited along with Form 26QB within a week from the end of the month in which TDS was deducted. Buyer must give TDS certificate to the seller.

TDS rate: If PAN has been provided, TDS is 1% of sale value. Otherwise it is 20% of the sale value.

On NRIs: NRIs are not permitted to submit Form 15G/H for NRO deposits and TDS is mandatory on all incomes. In case of resident Indians, TDS kicks in only if interest exceeds Rs 10,000 a year. But there are no such threshold for NRO deposits. Easwar committee has recommended easing of TDS rules for NRIs.

TDS rate: 30% on interest income from bank deposits, 20% from corporate deposits, 15% on short-term capital gains if securities transaction tax (STT) has been paid and 10% on longterm capital gains. If no STT is paid on short-term gains, TDS is 30%. Flat rate of 20% on sale of property.

How to avoid it

TDS can be avoided by submitting Form 15G or 15H. Form 15H is for senior citizens. It can be submitted if there is no tax on total income. Form 15G is for everybody else, except NRIs. It can be filed if tax on total income is nil and total interest income is less than the basic exemption limit.

Source: The Economic Times

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TDS default: Income Tax department issues over 850 prosecution notices

The Income Tax department has issued over 850 prosecution notices to firms in the private and government domain in Karnataka and Goa on charges of delay in remitting TDS funds to the exchequer.

A senior official said notices where the tax department files court cases for default in Tax Deducted at Source (TDS) payments have been issued to defaulters who have deducted tax from the payees such as employees, professionals, contractors and others and have then delayed the remittance of tax in government coffers or the I-T department.

“The department has issued 859 prosecution show cause notices to various deductors which includes private entities, government agencies and public sector undertakings (PSUs) in Karnataka and Goa region. Karnataka and Goa region.

“In 48 cases, prosecution has been sanctioned and complaints have been filed in special Economic Offences courts,” the department said in a statement.

It said in 223 cases, deductors have filed applications for compounding of offences by paying taxes, apart from interest and penalty, at the rate of 3 per cent per month from due date of payment of TDS to the actual date of payment of TDS amount as compounding fees and charges.

Such action, the official said, has been initiated in other parts of the country as well and the data is being compiled.

In Delhi, Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra had recently written to the field offices of the department to step up action and check TDS defaults by firms and employers, especially in cases where such payments have dropped by more than 15 per cent as compared to last time.

With the current financial year drawing towards close, the CBDT boss issued the directive so that TDS collections, which form a substantial chunk in the overall direct tax collections, meet the set regard of Rs 3.50 lakh crore.

The I-T department has netted Rs 2.85 lakh crore revenue till January 31, 2017 under the TDS category.

As per rules, all sums deducted as Income Tax shall be paid to the credit of the central government within seven days from the end of the month in which the deduction is made or before the prescribed dates.

Failure to adhere to the above provisions are liable to attract prosecution proceedings under Section 276B of the Income Tax Act, 1961 besides interest and penalty.

The official said the courts have also cracked down on such instances in the past and in one case in Bengaluru, the court had convicted the defaulters to three years of Rigorous Imprisonment with a fine of Rs 50,000 each for the delayed payment of TDS to government account.

Source: The Economic Times

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