Income Tax: Taxpayers should rejoice! Additionally, you will get an income tax notification for this error; review the information right away

Income Tax: Taxpayers should rejoice! Additionally, you will get an income tax notification for this error; review the information right away

Income Tax: Taxpayers should rejoice! Additionally, you will get an income tax notification for this error; review the information right away

On social media, a large number of taxpayers—particularly those who are purchasing homes—are reporting that they have received notifications from the Income Tax Department about the decrease in TDS. Additionally, the remaining TDS (including interest)—roughly 20% of the purchase price of the property—must be deposited by these house purchasers.

On social media, a large number of taxpayers—particularly those who are purchasing homes—are reporting that they have received letters from the Income Tax Department about underpayment of TDS. Additionally, the remaining TDS (including interest)—roughly 20% of the purchase price of the property—must be deposited by these house purchasers.

Homebuyers are required to pay 1 percent TDS if the purchase price of the house is Rs 50 lakh or higher, as per income tax regulations. Should a PAN number be missing, TDS rises to 20%. Moreover, the PAN will stop functioning if it is not connected to Aadhaar. Actually, a lot of house purchasers are getting notifications because they haven't connected their PAN number to Aadhaar.

TDS while buying real estate

"According to Section 194IA of the Income Tax Act, 1961, if the property price as well as stamp duty value exceeds Rs 50 lakh, 1% tax has to be paid," said Suresh Surana, founder of the tax consulting firm RSM India. Sellers withheld payments from purchasers of homes. will be.' The purchaser of the house must submit this sum to the Income Tax Department in a 30-day period. When completing the return, the seller has the option to modify this amount in his income tax obligation.

TDS if Aadhaar and PAN are not connected

In the event that a PAN card is absent, additional TDS is required by law to be withheld. "Tax will be deducted at the rate of 20 percent if the seller of the property or the buyer of the house was cannot given PAN," said Surana. In addition, the CBDT circular states that if an individual has not connected his PAN. PAN card will not function on July 1, 2023; Aadhaar and PAN are valid till June 30, 2023. The norm of deducting TDS at higher rates will be applicable in this scenario.

Issues with notice period as well

What happens if, prior to sending the notification, the buyer pays the seller 99% of the total price after deducting 1% TDS? The Income Tax Act states that the buyer of the property, not the seller, is responsible for paying the penalty and interest rate in the event that TDS regulations are broken. "It is the home buyer's responsibility to ensure whether or not the seller's PAN number is linked to Aadhaar," Surana said. Should he neglect to do so and deduct less TDS, the buyer will bear the associated costs.

"Home buyers who have received the notice and have not been able to deduct tax at the rate of twenty percent will have to deposit the remaining amount," he stated. In addition, interest on the outstanding amount of TDS will be assessed at a rate of one percent per month. Nonetheless, purchasers of real estate may request an extra 19% TDS from the seller.

What actions should purchasers take?

You should first verify the seller's PAN number online. An OTP will be issued to the seller's mobile device for verification after you verify the seller's name, date of birth, and cellphone number. You may check the website to see whether the PAN number is operational as soon as you input the OTP. You may also file an appeal with the Income Tax Tribunal if you are a house buyer and you have got a notice for incorrectly deducting TDS. If you can demonstrate that you were unaware of the regulation about deducting excess TDS, you can contest the notice. able to.