What is GST and its impact on real estate?
Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017 and is applicable throughout India which replaced multiple cascading taxes levied by the central and state governments earlier. Under GST, goods and services are taxed at the following rates, 0%, 5%, 12%, 18% and 28%. The effective GST rate on under- construction real estate projects will be 12% after one third abatement for land cost on 18%. However, GST would not be applicable on the units sold after availing completion certificate.
Is GST included in this price; am I eligible for input credit as per law?
GST would be payable additionally at the applicable rate on the total unit consideration as notified from time to time by the government. Input credit has already been applied for all buyers in the base price. The variable charges would attract GST at the notified rates which is 18% at present and is subject to change as per government directives.
What is TDS on property?
The Finance Bill 2013 has proposed that purchaser of an immovable property (other than rural agricultural land) worth â‚¹ 50 lakh or more is required to pay withholding tax at the rate of 1% from the consideration payable to a resident transferor.
I am a Buyer. Do I need to procure TAN to report the TDS on Property?
Buyer or Purchaser of the property is not required to procure Tax Deduction Account Number (TAN). The Buyer is required to quote his or her PAN and sellers PAN.
Who is responsible to deduct the TDS on sale of Property?
According to rules in respect of tax deducted at source, buyer of the property would have to deduct the TDS and deposit the same in Government treasury.
What is the due date of payment of TDS on sale of property?
As per the CBDT notification no. 30/2016 dated April 29, 2016, the due date of payment of TDS on transfer of immovable property has been extended to thirty days (from existing seven days) from the end of the month in which the deduction is made.
What if I don’t have the PAN of the seller, is it Mandatory?
PAN of the seller is mandatory. The same may be acquired from the Seller before effecting the transaction.
What is Form 26QB?
The online form available on the TIN website for furnishing information regarding TDS on property is termed as Form 26QB
What is Form 16B?
Form 16B is the TDS certificate to be issued by the deductor (Buyer of property) to the deductee (Seller of property) in respect of the taxes deducted and deposited into the Government Account.
What is Capital Gains on property purchase?
Property is considered a capital asset and Capital Gains Tax is levied on the gains arising from the sale of property. Such gains are calculated after adjusting the inflation rate, transfer and renovation charges.
I have filled Form 26QB and made the payment online, but I forgot to save the Acknowledgment Number generated at TIN website. From where can I get the Acknowledgment Number?
a) Acknowledgment number for the Form 26QB furnished is available in the Form 26AS (Annual Tax Statement) of the Deductor (i.e. Purchaser/Buyer of property). The same can be viewed from the TRACES website (www.tdscpc.gov.in) or b) Taxpayer can also click the option ‘View Acknowledgment’ hosted on the TIN website. Taxpayer needs to enter PAN of the Buyer and Seller, Total Payment and Assessment Year (as mentioned at the time of filing the Form 26QB) to retrieve the Acknowledgment Number.
What is the difference between long-term Capital Gains and short-term Capital Gains?
If the house is held for less than three years prior to its sale, it is termed as a short-term capital asset and any gain arising from the sale is treated as a short-term Capital Gain. There are no tax exemptions for short-term Capital Gains and one needs to pay it according to the applicable tax slab. However, if the property is sold after holding it for more than three years, it is treated as a long-term capital asset and the gain arising from it is called the long-term Capital Gain. Such gains attract a flat exemption rate of 20%.
How can one qualify for exemptions on the Capital Gains Tax?
There are a few exemptions available for long term Capital Gains, if you: Buy or construct a new house: If you build a new house or buy one from the money you receive from selling a property, you are exempted from paying the tax on Capital Gains. However, the new purchase should be done either one year before or within two years of sale and the construction should be completed within three years from the date of transfer. The new property bought or constructed should not be sold within three years from the date of its purchase or date of completion of construction. Capital Gain Account Scheme: Through the Capital Gain Account Scheme (CGAS), you can save the received money in designated banks. CGAS helps you in buying time to look for suitable investments as it serves to inform the Income Tax department that you plan to invest the money received, but at a later date.