What does section 194-IA say?

• When a person or an entity purchases property from a resident individual, it is necessary to deduct TDS.
• This rule does not apply to agricultural land.

Relief on property up to ₹ 50 lakh

If both the property price and stamp duty value are less than ₹50 lakh, then TDS is not required to be deducted.

When to deduct TDS?

TDS shall be deducted on the date of whichever event occurs earlier:

1. When money is transferred to seller’s account
2. or when payment is made—whether by cash, cheque, draft or other mode

Also applicable on NRI taxpayers

This rule also applies to non-resident taxpayers (NRIs). If you do not follow the rules, you may be considered an ‘assessee in default’ or in some cases, even a tax evader.

Important changes regarding TDS in section 194-IA from April 1, 2025, know the new rule

The rules related to tax deduction (TDS) in real estate transactions have been changed. The existing and new rules related to TDS under section 194-IA of the Income Tax Act are as follows:

• 1% TDS will be deducted on the purchase price or stamp duty value, whichever is higher.
• If the seller does not provide PAN or Aadhaar, the rate of TDS will be 20% (under section 206AA).
• The rule of ‘higher TDS rate for non-filers’ under section 206AB will not apply to section 194-IA from April 1, 2025.
• If PAN and Aadhaar are not linked, 20% TDS will be deducted under 206AA.
• If the seller is an NRI, TDS will be deducted under section 195 and not 194-IA.

This process is necessary under section 195 of the Income Tax Act

If an Indian resident buys immovable property from an NRI, then it is necessary to deduct TDS (Tax Deducted at Source) on the entire transaction amount. This provision has been made under Section 195 of the Income Tax Act, 1961.

According to Ankit Jain, partner of Ved Jain & Associates, in this situation, TDS is not deducted only on the capital gain, but on the entire sale consideration i.e. the sale price. This is done so that the tax on this income earned by the NRI in India can be recovered in advance.

If the payment is not taxable then approval has to be taken from AO

Rashi Khanna, Associate Partner, DMD Advocates, explains that if the buyer feels that this payment is not taxable for the NRI, he can apply for it to the Income Tax Officer (AO). Then the payment has to be made as per the order of the AO. If the buyer does not deduct TDS or deducts less TDS, he may have to face interest and penalty under the Income Tax Act. Therefore, it is important to be very careful in such cases.

Tax consultants warn that if the buyer fails to fulfil his obligation to deduct tax, he will be treated as an ‘assessee in default’ under section 201 of the Income Tax Act.
Tax expert Khanna said that in such cases, the buyer may have to pay 1 per cent monthly interest under section 201(1A). Apart from this, he can also be fined under section 271C, which will be equal to the amount of tax that should have been deducted under section 195.

According to Pallav Pradyumna Narang, partner at CNK, NRIs should ensure that the provisions of the Income Tax Act are followed while buying property. When an NRI buys property from a resident Indian and the value of the property exceeds Rs 50 lakh, it is necessary to deduct 1% tax at source (TDS) at the time of payment.

However, if the transaction is taking place between two NRIs and the seller is also an NRI, then in such a case there is no need to deduct tax.

The post New Tax Rules: Whether you are an NRI or a resident, keep these income tax rules in mind while buying a property first appeared on Rightsofemployees.com.

There is useful news for taxpayers. Now you will have to pay 1% TCS (tax collected at source) on the purchase of luxury items like handbags, wristwatches, shoes, high-end sportswear and art objects worth more than Rs 10 lakh. Currently, TCS is being levied at the rate of one percent on motor vehicles worth more than Rs 10 lakh from January 1, 2025.

Notification of Income Tax Department

The Income Tax Department has notified the imposition of one per cent TCS on the sale of specified luxury goods exceeding Rs 10 lakh from April 22, 2025. TCS is collected from the buyer at the time of sale of specified goods and can be adjusted against the buyer’s tax liability while filing income tax returns.

Tax deduction at source does not generate any additional revenue, but it helps the tax department to detect high-value expenditure as PAN details have to be submitted at the time of purchase. The TCS provision for luxury goods and motor vehicles worth more than Rs 10 lakh was introduced in the Budget in July 2024 through the Finance Act, 2024.

Know what is the detail

The responsibility to collect TCS will be on the seller. This will apply to notified goods such as wristwatches, art objects such as paintings, sculptures and antiques, collectibles such as coins and stamps, yachts, helicopters, luxury handbags, sunglasses, shoes, high-end sports apparel and equipment, home theater systems and horses for race or polo, etc.

Sandeep Jhunjhunwala, tax partner, Nangia Andersen LLP, said that this notification reflects the government’s intention to increase monitoring of high-value discretionary expenditure and strengthen audit in the luxury goods segment. This notification reflects the broader policy objective of expanding the tax base and promoting greater financial transparency.

Related Articles:-

EPS for Gig workers: Government is going to provide social security and health benefits to gig workers

NPS account: Govt has changed the rules, these NPS accounts will be closed soon, know all details

Pahalgam Terrorist Attack: India shuts border with Pakistan after Pahalgam attack in Kashmir

The post New Tax Rules: Big news for taxpayers, now you will have to pay tax on these items, notification issued first appeared on Rightsofemployees.com.

These focus on senior citizens, investors and commission earners. The purpose of these changes is to simplify the tax process for taxpayers and businessmen by removing difficult things. Let us see how these changes will benefit different categories.

Income

Senior citizens will now be exempted from TDS on interest income of up to Rs 1 lakh per year, which is much higher than the previous limit of Rs 50,000. Meanwhile, the TDS exemption limit for general citizens has been increased from Rs 40,000 to Rs 50,000. This also includes interest income earned from fixed deposits (FDs) and recurring deposits (RDs) and other such options.

Tax

Senior citizens can now avail tax exemption of up to Rs 15,000 depending on their tax bracket. Apart from this, the limit of TDS exemption on rental income has been increased from Rs 2.4 lakh to Rs 6 lakh per annum or Rs 50,000 per month. Whereas the previous limit was Rs 20,000 per month.

Stocks and Mutual Funds

Investors in stocks and mutual funds will also benefit from the increased TDS exemption on dividends and income from mutual fund units or specified companies, which has been raised from Rs 5,000 to Rs 10,000. Apart from this, individuals involved in cross-border transactions (i.e. transactions between two countries) will benefit from the changed TCS limit under the Liberalised Remittance Scheme (LRS), which has been raised from Rs 7 lakh to Rs 10 lakh. Meanwhile, education loans obtained from certain institutions will now be exempt from TCS at all.

Lottery

The government has also increased the TDS limit for income from lotteries, crossword puzzles and horse races. It is now more than Rs 10,000 per annum. Under the previous rules, TDS was applicable when the total winnings exceeded Rs 10,000 per annum, even if received in several smaller amounts. With the new rules, TDS will be deducted only when a single transaction exceeds Rs 10,000.

Insurance and Brokerage Commissions

Budget 2025 has increased the TDS limit for various commissions, providing relief to insurance agents and brokers. The TDS limit for insurance commission has been increased from Rs 15,000 to Rs 20,000, which will be effective from April 1, 2025. These changes are aimed at simplifying compliance requirements and improving cash flow for small income earners in these industries.

Related Articles:-

HRA Exemption: What to do if the landlord refuses to give the PAN number? Details Here

Driving License Remains Valid For 30 Days After Expiry, Get it Renewed Without Paying Fine

Train Cancelled: Indian Railways canceled 172 trains on this route, check route & list here

The post New Rules From 1st April: New tax rules are being implemented from April 1, so it is important to read it now first appeared on Rightsofemployees.com.