Page 15 - Seniors Today - February Issue
P. 15
In certain circumstances, the safe harbour for real estate is to be increased
taxed in the hands of the Seller u/s. 43CA, If, however, the stamp duty valuation is
sec.50C and sec.50CA, for example. more than 120% of the transaction value, then
There is, however, a margin given and this is the entire difference will be taxed in the hands
called a “safe harbour”. of the developer.
Now, in certain circumstances, this safe There will be a corresponding addition in
harbour is to be increased. the hands of the Purchaser u/s. 56.
So, the amendments proposed are to sec. TDS There are some important changes in
43CA and sec.56. relation to TDS.
Sec.43CA provides that if a Developer of Sec.206AB is now being introduced to
Real Estate sells a flat at below the Stamp say that if a person making payment has to
Duty valuation, then such shortfall in deduct tax at source, and the Payee has not
consideration will be taxed in his hands, as if filed a tax return for the last 2 years, then
he had received the full amount of the Stamp the rate for deduction of tax will not be the
Duty valuation. However, a margin of 10% normal rate but will be double the normal
has already been provided for. Now this safe rate, or will be 5% whichever is higher.
harbour has increased to 20% but only in So, if a person is paying interest to a lender
respect of- or fees to a professional then it will be the
(a) a property sold for a consideration of upto duty of the payer to find out whether the
Rs. 2 crore; other person has filed tax returns and if not,
(b) By the Developer; then the TDS will have to be at double the
(c) As a first time sale of that property; regular rate.
(d) only June 30, 2021. This can be an onerous task, because one
In such case, the safe harbour will be 20%, will have to check from every payee whether
i.e. if the flat is sold for Rs. 2 crore and the the return has been filed or not.
Stamp Duty valuation is upto Rs. 2.4 crore TDS on purchases. Upto now TDS has been
then there will be no tax on the notional primarily on contracts, on services, on rent,
income. interest etc. and not for purchase of goods.
SENIORS TODAY | ISSUE #20 | FEBRUARY 2021 15
