The government has increased the limit of exemption from TDS on house rent from Rs 2.4 lakh per annum to Rs 6 lakh. The Finance Minister said on February 1 that this will reduce the number of transactions falling under the scope of TDS. This will be convenient for small taxpayers. Let us know how both the tenant and the landlord will benefit from this announcement of the Finance Minister.

This is how the rule change will affect

Suppose you have a house which you have given on rent. Its annual rent is more than Rs 2.4 lakh. Till now, the rule was that your tenant would pay you the rent after deducting TDS on it . Now he will pay you the rent without deducting TDS. This will increase the amount of rent you get. The reason for this is that the government has increased the limit of exemption from TDS on house rent from Rs 2.4 lakh to Rs 6 lakh. This change in the rule will benefit both the tenant and the house owner.

Now TDS on rent of more than 6 lakh rupees

After the implementation of the new rule, if a tenant lives in a house whose annual rent is more than Rs 6 lakh, then he will have to pay the rent to the landlord after deducting TDS. The reason for this is that it is the responsibility of the tenant to deduct TDS on rent. Till FY19, the limit of exemption from TDS on rent was Rs 1.8 lakh. It is important to keep in mind that the tenant will have to deduct 10 percent TDS on the rent amount. In case the landlord does not have a PAN, the rate of TDS will increase to 20 percent.

Benefits to both the tenant and the landlord

Tax experts say that the change in the rules of TDS on rent in the Union Budget will benefit a large number of people. House rents have increased rapidly in the last few years. Due to this, the tenant had to deduct TDS if the rent was more than Rs 20,000 every month. This increased compliance. Now there is no need to deduct TDS on rent up to Rs 50,000 every month. This will provide great relief to people living on rent in big cities like Delhi and Mumbai.

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In fact, the government has tried to give a boost to the economy by giving income tax exemption to the middle class, which is the savior of the country’s economy. According to the new announcement, in the coming financial year 2025-26, salaried people will not have to pay any tax on income up to Rs 12.75 lakh annually.

There is no tax on income up to Rs 12 lakh

Other people will not be taxed on annual income up to Rs 12 lakh. This facility has been provided under the new system of income tax. Under the new system, the tax slabs have also been changed, due to which those earning up to Rs 24.75 lakh annually will be able to save Rs 1.10 lakh as compared to the present.

Regarding the changes in the tax slabs, Central Board of Direct Taxes Chairman Ravi Agarwal has said that the announcement of no tax on annual income up to Rs 12 lakh and changes in all tax slabs in the Union Budget may motivate more than 90 percent of taxpayers to adopt the new tax system. Till now this figure is about 75 percent.

8 crore people filed ITR

According to the Finance Ministry, by increasing the tax exemption limit from seven lakhs to 12 lakhs, one crore tax payers will become tax-free. In the current financial year, till December, more than eight crore people had filed Income Tax Returns (ITR), but out of these, 4.9 crore people had shown their income as zero tax.
Tax payers should know these thingsThere is a wave of happiness among the middle class people after the budget presented on Saturday. Meanwhile, every taxpayer must know about these ten things after the budget.

• Slab rates have been simplified under the new tax regime, which continues to be the default regime.
• Tax exemption for those availing new tax regime increased from ₹25,000 to ₹60,000 (not applicable for NRIs)
• Taxpayers can now claim the annual value of two self-occupied properties as “nil” without any conditions.
• The limit for tax collection at source (TCS) on foreign remittances has been increased from ₹7 lakh to ₹10 lakh.
• TCS will not be applicable on remittances made for educational expenses. (Earlier 0.5% was applicable on remittances above 7 lakhs)
• The time limit for filing updated returns has been extended from the existing 24 months to 48 months, but this includes 16 additional months and 70% interest on the aggregate.
• The tax deduction for self-contribution to the National Pension System (under the old tax regime) of Rs 50,000 has also been extended to contributions made in the name of minors under the NPS Vatsalya Scheme.
• The limit of tax deduction (TDS) on interest income for senior citizens has been increased to Rs 1 lakh from the present Rs 50,000.
• Rent paid by non-individuals is liable for TDS. The limit for such TDS has been raised from Rs 2.4 lakh per annum to Rs 50,000 per month or part of a month.
• The limit of TDS on dividend income and income from mutual fund units has been increased from the existing Rs 5,000 to Rs 10,000.

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Why property buyers should check seller’s PAN status properly: If you are going to buy a flat, shop or any such property whose price is Rs 50 lakh or more, then the information given here can save you from huge losses in future. Is. Actually, according to the income tax rules, if you are going to buy a property worth Rs 50 lakh or more, then at the time of payment, it is your responsibility to deduct 1 percent of the sale price as TDS and deposit it with the government. If you have ever bought or sold property before, you may be aware of this rule. But there is another condition associated with this rule, about which many people are not aware. Due to this, many times property buyers may have to suffer huge losses. But the information given here can save you from such possible losses.

What is the rule for TDS deduction at the time of payment?

According to Section 194 IA of the Income Tax Act, a buyer of property worth Rs 50 lakh or more has to deduct and deposit 1 percent of the value of the property as TDS. But the special thing is that the rule of 1 percent deduction is applicable only when the PAN number of the property seller is valid and active. That is, the PAN number of the property seller which is being used for deducting and depositing TDS must be valid and active at the time of payment. If the seller’s PAN is not valid at that time due to it not being linked to Aadhaar or for any other reason, then 1 percent TDS deduction will not be enough. According to the rules, if the buyer does not provide the seller’s PAN details or the seller’s PAN is not found valid at the time of payment, then the TDS deduction will directly increase from 1 percent to 20 percent. It is the responsibility of the buyer paying for the property to deduct this TDS and deposit it within 30 days. Form 26QB has to be used to deposit TDS. After this, it is the responsibility of the buyer to obtain Form 16B and provide it to the seller.

Activating PAN later is not enough

Even if you talk to the property seller and get his PAN status validated and activated after receiving the notice from the Income Tax Department, this will not give you any relief. The reason for this is whether the TDS liability will be 1 percent or 20 percent. This is decided by the PAN status of the property seller at the time of payment. That is, if the seller’s PAN is inactive or invalid at the time of payment and later becomes ‘valid’, the TDS liability will still remain at 20 percent. Under Income Tax rules, if the buyer is responsible for deducting TDS and making the payment while purchasing the property, then it is also his responsibility to check the PAN status of the seller.

What could be the result of deducting less TDS?

If you made a payment for a property worth Rs 50 lakh or more by deducting 1% TDS and later found out that the PAN number of the property seller given by you was not valid and active at the time of payment, then the Income Tax Department will charge you the remaining amount. Can give notice to pay 19 percent TDS. In the notice from the Income Tax Department, you may be asked to pay 19 percent TDS as well as interest and penalty at the rate of 1 percent per month on the outstanding amount. The amount of fine can be equal to the amount of outstanding tax. Since the seller of the property did not provide you with a valid PAN number, you can ask him to pay an additional 19% TDS and the penalty applicable thereon. But the Income Tax Department will issue the notice only to you. The best way to avoid this problem is that before making payment for the property, you not only get the PAN details of the seller, but also check whether the PAN number is valid at that time or not.

TDS Rules for Property Buyers: If you are going to buy a property, then read the information given here carefully, otherwise you may have to suffer huge losses in the future.

Why property buyers should check seller’s PAN status properly: If you are going to buy a flat, shop or any such property whose price is Rs 50 lakh or more, then the information given here can save you from huge losses in future. Is. Actually, according to the income tax rules, if you are going to buy a property worth Rs 50 lakh or more, then at the time of payment, it is your responsibility to deduct 1 percent of the sale price as TDS and deposit it with the government. If you have ever bought or sold property before, you may be aware of this rule. But there is another condition associated with this rule, about which many people are not aware. Due to this, many times property buyers may have to suffer huge losses. But the information given here can save you from such possible losses.

What is the rule for TDS deduction at the time of payment?

According to Section 194 IA of the Income Tax Act, a buyer of property worth Rs 50 lakh or more has to deduct and deposit 1 percent of the value of the property as TDS. But the special thing is that the rule of 1 percent deduction is applicable only when the PAN number of the property seller is valid and active. That is, the PAN number of the property seller which is being used for deducting and depositing TDS must be valid and active at the time of payment. If the seller’s PAN is not valid at that time due to it not being linked to Aadhaar or for any other reason, then 1 percent TDS deduction will not be enough. According to the rules, if the buyer does not provide the seller’s PAN details or the seller’s PAN is not found valid at the time of payment, then the TDS deduction will directly increase from 1 percent to 20 percent. It is the responsibility of the buyer paying for the property to deduct this TDS and deposit it within 30 days. Form 26QB has to be used to deposit TDS. After this, it is the responsibility of the buyer to obtain Form 16B and provide it to the seller.

Activating PAN later is not enough

Even if you talk to the property seller and get his PAN status validated and activated after receiving the notice from the Income Tax Department, this will not give you any relief. The reason for this is whether the TDS liability will be 1 percent or 20 percent. This is decided by the PAN status of the property seller at the time of payment. That is, if the seller’s PAN is inactive or invalid at the time of payment and later becomes ‘valid’, the TDS liability will still remain at 20 percent. Under Income Tax rules, if the buyer is responsible for deducting TDS and making the payment while purchasing the property, then it is also his responsibility to check the PAN status of the seller.

What could be the result of deducting less TDS?

If you made a payment for a property worth Rs 50 lakh or more by deducting 1% TDS and later found out that the PAN number of the property seller given by you was not valid and active at the time of payment, then the Income Tax Department will charge you the remaining amount. Can give notice to pay 19 percent TDS. In the notice from the Income Tax Department, you may be asked to pay 19 percent TDS as well as interest and penalty at the rate of 1 percent per month on the outstanding amount. The amount of fine can be equal to the amount of outstanding tax. Since the seller of the property did not provide you with a valid PAN number, you can ask him to pay an additional 19% TDS and the penalty applicable thereon. But the Income Tax Department will issue the notice only to you. The best way to avoid this problem is that before making payment for the property, you not only get the PAN details of the seller, but also check whether the PAN number is valid at that time or not.

The post Why property buyers should check seller’s PAN status properly? first appeared on Rightsofemployees.com.

Why property buyers should check seller’s PAN status properly: If you are going to buy a flat, shop or any such property whose price is Rs 50 lakh or more, then the information given here can save you from huge losses in future. Is. Actually, according to the income tax rules, if you are going to buy a property worth Rs 50 lakh or more, then at the time of payment, it is your responsibility to deduct 1 percent of the sale price as TDS and deposit it with the government. If you have ever bought or sold property before, you may be aware of this rule. But there is another condition associated with this rule, about which many people are not aware. Due to this, many times property buyers may have to suffer huge losses. But the information given here can save you from such possible losses.

What is the rule for TDS deduction at the time of payment?

According to Section 194 IA of the Income Tax Act, a buyer of property worth Rs 50 lakh or more has to deduct and deposit 1 percent of the value of the property as TDS. But the special thing is that the rule of 1 percent deduction is applicable only when the PAN number of the property seller is valid and active. That is, the PAN number of the property seller which is being used for deducting and depositing TDS must be valid and active at the time of payment. If the seller’s PAN is not valid at that time due to it not being linked to Aadhaar or for any other reason, then 1 percent TDS deduction will not be enough. According to the rules, if the buyer does not provide the seller’s PAN details or the seller’s PAN is not found valid at the time of payment, then the TDS deduction will directly increase from 1 percent to 20 percent. It is the responsibility of the buyer paying for the property to deduct this TDS and deposit it within 30 days. Form 26QB has to be used to deposit TDS. After this, it is the responsibility of the buyer to obtain Form 16B and provide it to the seller.

Activating PAN later is not enough

Even if you talk to the property seller and get his PAN status validated and activated after receiving the notice from the Income Tax Department, this will not give you any relief. The reason for this is whether the TDS liability will be 1 percent or 20 percent. This is decided by the PAN status of the property seller at the time of payment. That is, if the seller’s PAN is inactive or invalid at the time of payment and later becomes ‘valid’, the TDS liability will still remain at 20 percent. Under Income Tax rules, if the buyer is responsible for deducting TDS and making the payment while purchasing the property, then it is also his responsibility to check the PAN status of the seller.

What could be the result of deducting less TDS?

If you made a payment for a property worth Rs 50 lakh or more by deducting 1% TDS and later found out that the PAN number of the property seller given by you was not valid and active at the time of payment, then the Income Tax Department will charge you the remaining amount. Can give notice to pay 19 percent TDS. In the notice from the Income Tax Department, you may be asked to pay 19 percent TDS as well as interest and penalty at the rate of 1 percent per month on the outstanding amount. The amount of fine can be equal to the amount of outstanding tax. Since the seller of the property did not provide you with a valid PAN number, you can ask him to pay an additional 19% TDS and the penalty applicable thereon. But the Income Tax Department will issue the notice only to you. The best way to avoid this problem is that before making payment for the property, you not only get the PAN details of the seller, but also check whether the PAN number is valid at that time or not.

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