A TDS of 1 per cent on sale of immovable property that was announced in the Union Budget of 2013 has been notified by the Income Tax Department, according to news reports. This means that tax would be deducted at source (TDS) on sale of immovable property valued in excess of Rs 50 lakhs. This would exclude sale of agricultural land. So, if you sell your land or house, be prepared to get 1 per cent less, if the property sold is over Rs 50 lakhs.
Pertinently, if the owners selling his property do not have PAN Card, TDS would be cut at 20 per cent. It's therefore imperative to have A PAN number.
Experts are not sure whether the move which is now notified would lower tax evasion. Many of the transaction in the real estate market take place on cash basis and unless this is limited there would not be a drastic impact. However, it could curb speculative activity in property, where one property has been sold several times.
If you are buying a "new" property from a builder you don't have to worry about TDS.