When I was dealing with my brother’s property registration, one question he asked me was regarding the TDS on stamp duty charges. After researching a bit, I informed him, usually, TDS is not applicable on stamp duty itself, only if the property value is less than Rs. 50 lakhs.
Is TDS Applicable on Stamp Duty in India?
Samp duty itself is a state-imposed tax on property transfers, while TDS is a method of collecting income tax by deducting it at the source, under the framework of the Income Tax Act. TDS does apply to property transactions under Section 194-IA, which mandates that the buyer must deduct 1% TDS on the higher of the sale consideration or the stamp duty value, provided that either exceeds Rs 50 lakh.
This means while stamp duty itself is not directly taxed via TDS, it's used for calculating the TDS base when it's higher than the agreed sale value.
Land transactions and properties below the Rs 50 lakh threshold are exempt from TDS.
Additionally, if the seller doesn’t provide a PAN, the TDS rate rises significantly to 20% instead of the standard 1%.
I hope you found this information helpful.
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I recently came across your query, is TDS on stamp duty applicable. TDS (Tax Deducted at Source) is not applicable to stamp duty itself. Stamp duty is a tax levied on property transfer. The buyer or seller pays it during a real estate transaction.
However, here are a few key points to consider:
Stamp duty and TDS are different tax types. While stamp duty is a state tax on real estate transactions, TDS is a central tax on specific payments, such as income.
TDS on Property Transactions: While TDS is not applicable on stamp duty, TDS may apply to the sale of property if the transaction involves a payment to a resident seller exceeding a specified threshold. This TDS is deducted from the sale amount.
If applicable, the TDS rate on property transactions is 1% of the total sale consideration for residents and can vary for non-residents.
It's important to ensure compliance with TDS provisions if applicable, as failing to deduct TDS when required can lead to penalties.
While TDS TDS does not apply to stamp duty, it may apply to certain property sales transactions. Always consult with a tax professional or legal advisor for specific situations. I hope you get an idea, is TDS applicable on stamp duty.
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Is TDS Applicable on Stamp Duty?
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2024-10-16T14:17:19+00:00 2024-10-17T22:28:50+00:00Comment
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