This was perhaps the most significant step taken by the Budget.
With effect from 1st October 2012, it will be obligatory for the buyer of a property at the time of making payment to the seller, to deduct tax at source @ 1% of such sum, if the sale consideration exceeds -
- Rs. 50 Lakhs where the property is situated in urban areas
- Rs. 25 Lakh in other cases.
There will be no registration of the sale of property unless the buyer furnishes proof of deduction and payment of TDS.
For reducing the compliance burden on the transferee, it is also proposed that a simple one page challan for payment of TDS would be prescribed containing details (including PAN) of transfer-er and transferee and also certain details of the property.
The transferee would not be and Collection Account Number (TAN) or to furnish any TDS statement as this would be mostly a one time transaction. The transferee would get credit of TDS like any other pre-paid taxes on the basis of information furnished by the transferee in the challan of payment of TDS.
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