Income Tax News: Homebuyers are currently receiving immediate relief from TDS deductions from the Income Tax Department. In order to do this, the property seller must link his PAN-Aadhaar by May 31. The buyer will be required to pay extra TDS at the higher rate in the event that the seller defaults. Numerous individuals were also served notices in this regard.
Notices to Home Buyers
Over 16,000 home buyers nationwide received notices in the past year asking them to pay extra TDS on the property they had purchased. According to the Income Tax Department, the sellers’ PAN numbers are either inactive or unconnected to Aadhaar when they sold this property. The buyer will be responsible for additional tax in this case.
The department has now provided relief to these home buyers and sellers and extended the deadline for linking PAN and Aadhaar until May 31, 2024, in a recently released circular. This implies that in order to have the tax notice dismissed, the buyer will need to ask the seller to connect his PAN with his Aadhaar.
TDS Requirements for Property Buyers
Income tax regulations require home buyers to deduct one percent TDS from the sale price and deposit it with the government if the value of the property they are buying exceeds Rs 50 lakh. The TDS rate rises to 20% in the event that the property seller is deemed inactive or lacks a PAN.
The regulations, which go into effect on July 1, 2023, state that a PAN is deemed inactive if it is not connected to Aadhaar. The Income Tax Department has demanded that the seller pay an additional 19 percent TDS in a notice, citing the seller’s PAN’s inactivity.
Experts Advocate for Seller Accountability
Experts in this field suggest that the Income Tax Department should force the seller to link his PAN card to Aadhaar rather than placing the cost of TDS on the buyers. In addition, a notification must be given to the seller if PAN-Aadhaar is not connected by the deadline.
