CREDAI seeks withdrawal of 1% TDS
Confederation of Real Estate Developers Associations of India (CREDAI), which represents the organised real estate developers and builders across the country is seeking withdrawal of the budget proposal to impose 1 % tax deduction at source (TDS) on any property deal other than agriculture land completely.
CREDAI recently forwarded a representation to the finance minister. According to the chairman of CREDAI, the execution of this budget proposal will result in more complexities and harassment of consumers.
He added that buyers will suffer more with this move as they have to withhold the amount, deposit this to tax authorities, obtain Tax Deduction Account Number (TAN’), file TDS returns and then issue TDS certificate. This means a salaried individual can purchase his dream home only once in his entire lifetime keeping in view the increasing property prices (especially in metro cities).
He pointed out that the real estate transactions of top six markets, i.e. Bangalore, Mumbai, Chennai, Hyderabad and Pune, will be highly affected by this move.
The budget proposal says that if a person has a property (house or plot) which is sold for more than Rs 50 lakh then, he or she has to pay a TDS of one percent while selling it. The property consideration is over 50 lakh in specified urban areas and 20 lakh in any other area.
The proposal will come in action from June 1, 2013. Also, proof of deduction and payment of TDS is mandatory for getting transaction registered.
In New Delhi, many buyers are worried to pay TDS as they have booked under-construction apartments costing over Rs 50 lakh. In this regard, the question arises that who will deduct tax, the buyer or the bank ? It is because the payment of buyer is made directly by the bank.
Likewise, the developers may also face administrative issues as they have to claim the TDS in return of income with thousands of TDS certificates collected.
Some are waiting for clarity on certain aspects of this proposal while the regulator body is completely against this proposal.
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