CONFUSION-ERROR-SYSTEM FAILURE – BBMP PROPERTY TAX


The BBMP website for the collection of PROPERTY TAX for 2016-17 has defaulted in its operation or performance.  The BBMP is upgrading and rectifying the errors in their system and software. Hope it will be done soon.

 

PROPERTY TAXES WILL BE HIKED FROM 01-04-2016, SUBJECT TO THE LEGAL CLEARANCE IN BBMP LIMITS- HIKE BETWEEN 30% TO 40% ACTUALS BUT ON PAPER IT IS 20% AND 25%


Revision of property tax in Bangalore and its legal issues

The Government has approved the revision of property taxes in BBMP limits after 7 long years and the hike is in the range 20% of residential buildings and 25% for commercial buildings.

It is also discovered that over 2 lakh property owners are not paying the taxes at all and out of 16.80 lakhs property owners, majority of them have falsified the actual size or extent of construction.

A group of citizens have demanded that katha be withdrawn for the properties which have violated the sanctioned building plan and There is also a possibility to link the tax payment to the sanctioned building plan.

The tax slabs have also been revised with the guidance value of the properties and the actual hike will be much more than 20% to 25%.

The burgeoning city has witnessed a growth of around 70 per cent with many suburbs seeing exponential appreciation in land prices. As a result, areas like Whitefield, Yelahanka and other suburbs are likely to jump two or even three tax zones. This will effectively hike property tax in these areas by 35 to 40 per cent.

The Urban Development Department  is finalizing the draft notification of the property tax revision and would be published in couple of days, so that the property owners can raise objections after considering which the final notification would be issued.

But, there is a legal problem for the revision, to revise the property taxes, The government should have set up the Karnataka Property Tax Board as per the  KMC Act, 1976 was amended in 2011, as per the recommendations of the 13th Finance Commission.

There is a demand that Illegal buildings, buildings with violation and B katha buildings must be taxed 5 times the normal tax.

The ISSUES the buyer may face to implement this TDS provisions – The rate of 1% may increase to 20% if seller does not provide PAN due to overriding provision of section 206AA of ITA.


  • Obtaining TAN number for complying with the provisions;
  • Issuance of TDS certificate to the seller;
  • Filing of TDS return quarterly and mention PAN of the seller;
  • Taxes needs to be deposited within the specified time limit with the Government; and
  • May be scrutinized by the TDS officer

The rate of 1% may increase to 20% if seller does not provide PAN due to overriding provision of section 206AA of ITA.

TDS ON THE SALE OF IMMOVABLE PROPERTIES – DETAILS IN A NUTSHELL


Tax Deduction at Source (TDS) on transfer of certain immovable properties (other than agricultural land) for value  Exceeding Rs.50 Lakh effective from 01-06-2013

The Finance Act 2013 had provided that purchaser of an immovable property (other than agricultural land) worth over Rs 50 lakh is required to pay withholding tax at the rate of 1% from the consideration payable to a resident transferor.  The rate at which tax is to be cut is 1%, but it would go up to as high as 20% if the seller does not disclose his permanent account number.  This amendment is effective from 1st June, 2013.

There is a statutory requirement under section 139A of the Income-tax Act read with rule 114B of the Income-tax Rules, 1962 to quote Permanent Account Number (PAN) in documents pertaining to purchase or sale of immovable property for value of Rs.5 lakh or more. However, the information furnished to the department in Annual Information Returns by the Registrar or Sub-Registrar indicate that a majority of the purchasers or sellers of immovable properties, valued at Rs.30 lakh or more, during the financial year 2011-12 did not quote or quoted invalid PAN in the documents relating to transfer of the property.

Under the existing provisions of the Income-tax Act, tax is required to be deducted at source on certain specified payments made to residents by way of salary, interest, commission, brokerage, professional services, etc. On transfer of immovable property by a non-resident, tax is required to be deducted at source by the transferee. However, there is no such requirement on transfer of immovable property by a resident except in the case of compulsory acquisition of certain immovable properties. In order to have a reporting mechanism of transactions in the real estate sector and also to collect tax at the earliest point of time, it is provided  to insert a new section 194-IAwef 01.06.2013  to provide that every transferee, at the time of making payment or crediting of any sum as consideration for transfer of immovable property (other than agricultural land) to a resident transferor, shall deduct tax, at the rate of 1% of such sum. In order to reduce the compliance burden on the small taxpayers, it was  further provided that no deduction of tax under this provision shall be made where the total amount of consideration for the transfer of an immovable property is less than fifty lakh rupees.

A simple one page challan for payment of TDS would be provided containing details (including PAN) of transferor and transferee and also certain details of the property.

The transferee would not be required to obtain any Tax Deduction and Collection Account Number (TAN) or to furnish any TDS statement as this would be mostly a one time transaction.  

The transferor would get credit of TDS like any other pre-paid taxes on the basis of information furnished by the transferee in the challan of payment of TDS.

The New Payment Challan for TDS requires the Property Purchaser to Furnish following details in the form for payment of TDS :-

  • Permanent Account No. (PAN) of Transferee(Payer/Buyer)
  • Permanent Account No. (PAN) of Transferor (Payee/Seller)
  • Category of PAN of Transferee
  • Category of PAN of Transferor
  • Full Name of the Transferee
  • Full Name of the Transferor
  • Complete Address of the Transferee
  • Complete Address of the Transferor
  • Complete Address of the Property Transferred
  • Details of amount paid/Credited
  • Tax Deposit Details

 

TDS ON PROPERTY TRANSACTION FROM 01-06-2013


TAX DEDUCTED AT SOURCE (TDS) ON THE PROPERTY TRANSACTIONS ABOVE THE VALUE OF RS50 LAKHS IS EFFECTIVE FROM 01-06-2013, A NOTIFICATION TO THIS EFFECT IS PLACED BY THE INCOME TAX DEPARTMENT.  THIS NOTIFICATION IS NOT APPLICABLE TO AGRICULTURAL LANDS.

ONLINE TDS PAYMENT IS AVAILABLE AND THOSE, WHO CANNOT ACCESS IT, CAN MAKE/DEPOSIT THE TAX IN THE AUTHORISED BANKS.

THE VALUE OF THE PROPERTY IS CONSIDERED ON THE GUIDELINE VALUE PUBLISHED BY THE DEPARTMENT OF STAMPS AND REGISTRATION OR THE CONSIDERATION AMOUNT, WHICHEVER IS HIGHER.

NOTICE TO OVER 1,75,000 INCOME TAX ASSESSEES WHO HAVE NOT FILED THEIR INCOME TAX RETURNS


THE INCOME TAX DEPARTMENT HAS IDENTIFIED 12 LAKH NON-FILERS AND HAVE STARTED THE EXAMINATION OF THE DATA AND HAS ISSUED 1,75,000 NOTICES AND MORE IS EXPECTED SOON.

The Income Tax Department has also initiated a Data Warehouse and Business Intelligence (DW & BI) Project to develop an integrated platform for effective utilisation of information to promote voluntary compliance and deter non-compliance

BBMP building plan and the issues


TURN TO PAGE 3 AND READ THE GOOF UP

Read

http://archives.kannadaprabha.com/pdf/epaper.asp?pdfdate=3/5/2013

BUDGET – INTEREST BENEFIT FOR LOWER CATEGORY – TDS FOR HIGHER VALUE HOMES – SERVICE TAX ABATEMENT AT 70% FOR HIGH END APARTMENTS


First Home Buyer will get an additional benefit on Interest limit:

There is an additional deduction available on interest repaid on a loan for a first time house purchase. The benefit has been increased by an additional Rs 1 lakh and this will be over and above the Rs 1.5 lakh limit already available,provided, if the house property price is less than Rs 40 lakh and the loan(availed) is Rs 25 lakh or less. This benefit can be claimed or availed in the next year, if not availed in the first year.

Tax Deducted at Source:

The Finance Minister has proposed 1% TDS for all immovable properties valued over Rs50,00,000/-. The seller of the house property worth Rs 50 lakh or more, will have to ensure a 1% tax deduction at source on the amount of the sale and will have to deposit this with the government. The TDS amount has to be deposited as per the guidelines and obtain a certificate and must be attached or furnished or submitted to the sub-registrar at the time of registration.

Service Tax:

As per the new proposal, The Service Tax for the new apartments(high end) either 2000 Square feet of CARPET AREA or the VALUE IS ABOVE Rs1,00,00,000/-, the abatement is 70%, which was uniform at 75% in the preceding year.

It means that the high end apartments will have to pay additional service tax on 5%.

Details:

 

Tax Deduction at Source (TDS) on transfer of certain immovable properties (other than agricultural land)

This amendment will take effect from 1st June, 2013.

There is a statutory requirement under section 1 39A of the Income-tax Act read with rule 11 4B of the Income-tax Rules, 1962 to quote Permanent Account Number (PAN) in documents pertaining to purchase or sale of immovable property for value of Rs.5 lakh or more. However, the information furnished to the department in Annual Information Returns by the Registrar or Sub-Registrar indicate that a majority of the purchasers or sellers of immovable properties, valued at Rs.30 lakh or more, during the financial year 2011-12 did not quote or quoted invalid PAN in the documents relating to transfer of the property.

Under the existing provisions of the Income-tax Act, tax is required to be deducted at source on certain specified payments made to residents by way of salary, interest, commission, brokerage, professional services, etc. On transfer of immovable property by a non-resident, tax is required to be deducted at source by the transferee. However, there is no such requirement on transfer of immovable property by a resident except in the case of compulsory acquisition of certain immovable properties. In order to have a reporting mechanism of transactions in the real estate sector and also to collect tax at the earliest point of time, it is proposed to insert a new section 194-IA to provide that every transferee, at the time of making payment or crediting of any sum as consideration for transfer of immovable property (other than agricultural land) to a resident transferor, shall deduct tax, at the rate of 1% of such sum.

In order to reduce the compliance burden on the small taxpayers, it is further proposed that no deduction of tax under this provision shall be made where the total amount of consideration for the transfer of an immovable property is less than fifty lakh rupees.

Changes in Service Tax – High end apartments

This will come into effect from March 1, 2013.

Subject: Union Budget 2013: Changes in Service Tax-reg.

The service tax changes in Budget 2013 are largely guided by the objectives to provide a stable tax regime and improve voluntary compliance. The important changes are as follows:

A. Legislative changes

Following changes are being made in the Finance Act, 1994:

C. Abatement

5. The abatement available under S. No 12 of notification 26/2012-ST dated June 20, 2012 for construction of a complex, building, civil structures etc. is being reduced from the existing 75% to 70% for construction other than residential properties having a carpet area up to 2000 sq ft or where the amount charged is less than Rs. 1 crore.

 

TAX BENEFITS OF INVESTMENT IN RESIDENTIAL UNIT

This amendment will take effect from 1st April, 2014

Income tax benefit

A new section 80EE, has been proposed in the Direct Tax, which provides an additional exemption of Up to Rs. 1 lakh against the interest payable.

The proposed new section 80EE seeks to provide that in computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section,

  • interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.
  • It is further provided that the deduction under the proposed section shall not exceed one lakh rupees
  • and shall be allowed in computing the total income of the individual for the assessment year beginning on 1st April, 2014
  • and in a case where the interest payable for the previous year relevant to the said assessment year is less than one lakh rupees, the balance amount shall be allowed in the assessment year beginning on 1st April, 2015.

It is also provided that the deduction shall be subject to the following conditions:-

(i)  the loan is sanctioned by the financial institution during the period beginning on 1st April, 2013 and ending on 31st March, 2014;

(ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed twenty-five lakh rupees;

(iii)  the value of the residential house property does not exceed forty lakh rupees;

(iv)  the assesse  does not own any residential house property on the date of sanction of the loan.

It is also provided that where a deduction under this section is allowed for any assessment year, in respect of interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provisions of the Income-tax Act for the same or any other assessment year.

It is also proposed to define the term “financial institution”.

This amendment will take effect from 1st April, 2014 and accordingly apply in relation to the assessment year 2014-15 and subsequent assessment year.

 

SERVICE TAX ON APARTMENTS AND CONSTRUCTION SERVICES-ABATEMENT 75%


SERVICE TAX ON APARTMENTS AND CONSTRUCTION SERVICES

Construction services – 25% taxable

Abatement of 75%.

Service provided with respect to

  • Construction of complex, building, civil structure and part thereof , intended for sale , wholly or partially
  • Except those where entire consideration is received after issuance of completion certificate by the competent authority.
  • This is subject to the condition that input used for providing the taxable services have not been taken under the provision of CENVAT Credit Rules, 2004.
  • Value of land is included in the amount charged from the service recipient

Further, for the purpose of valuation the amount charged shall be the sum total of the amount charged for the service including the fair market value of all the goods and services supplied by the recipient in or in relation to the services , whether or not supplied under the same contract or any other contract , after deducting :

1)    The amount charged for such goods or services supplied to the service provider, if any: and

2)    The value added tax or sales tax, if any, levied thereon.

SERVICE TAX IS 12.36%

ABATEMENT IS 75%

TAXABLE IS 25%

 

PROPERTY REGISTRATION CHARGES AT BANGALORE


THE STAMP DUTY IS 5.6% ON THE GUIDANCE VALUE OR THE MARKET VALUE OR THE CONSIDERATION SHOWN IN THE DOCUMENT- WHICHEVER IS HIGHER. IT IS APPLICABLE FOR BBMP LIMITS PROPERTY.

THE REGISTRATION FEE IS 1% ON THE GUIDANCE VALUE OR THE MARKET VALUE OR THE CONSIDERATION SHOWN IN THE DOCUMENT- WHICHEVER IS HIGHER. IT IS APPLICABLE FOR BBMP LIMITS PROPERTY.

THE TOTAL EXPENDITURE/EXPENSES/FEE/CHARGES IS 6.6%.

HOME LOANS AND RBI DIRECTIVES – TAX EVASION BY THE BUYERS IS UNDER SCRUTINY


RBI HAS DIRECTED ALL THE BANKS NOT TO OVER VALUE THE PROPERTIES WHICH INCLUDES STAMP DUTY, REGISTRATION FEE, SERVICE TAX, VAT AND OTHER ADDITIONS, WHILE PROCESSING THE HOME LOANS, AS THE REGULATOR RECEIVED COMPLAINTS OF SUCH DISCREPANCIES BY SOME OF THE BANKS.

THE INCOME TAX DEPARTMENT IS EXAMINING THE HOME LOANS APPLICATIONS AND SANCTIONS AS IT IS NOTICED THAT MANY ASSESSEES HAVE FILED THE TAX RETURNS, WHICH HAVE SOME UNDISCLOSED TRANSACTIONS, TO AVOID THE PAYMENT OF TAXES.  

THE BUYERS ENTER INTO AN AGREEMENT OF SALE WITH THE BUYER FOR XXXXX PRICE AND SUBMIT THE SAME FOR HOME LOAN SANCTION AND REGISTER THE SAME PROPERTY FOR THE LESSER VALUE TO AVOID OR EVADE INCOME TAX, STAMP DUTY AND REGISTRATION FEE.  THE INCOME TAX DEPARTMENT IS COLLECTING INFORMATION OF SUCH TRANSACTIONS AND TAX EVADERS WILL BE PENALISED.  THEHOME LOAN BUYERS ENTER INTO A SALE AGREEMENT FOR THE ACTUAL VALUE OF THE  PROPERTY OR HIGHER VALUE OF THE PROPERTY TO AVAIL LOANS AND AT THE TIME OF REGISTRATION, REGISTER THE SAME FOR LESSER VALUE TO EVADE INCOME TAX, SALES TAX, SERVICE TAX, STAMP DUTY AND REGISTRATION FEE. 

 

PROPERTY BUYERS WHO HAVE AVAILED LOAN HAVE ALSO ENTERED INTO SEVERAL DUBIOUS AGREEMENTS AND THE BUILDERS COLLECT THE PAYMENT UNDER VARIOUS HEADS AND IN DIFFERENT NAMES, BUT ARE CAUGHT, AS THEY HAD ENTERED INTO THE AGREEMENT OF SALE AND THESE ARE OFFICIALS DOCUMENTS, BASED ON THESE DOCUMENTS THE LOAN IS SANCTIONED.

DOCUMENTS REQUIRED TO SCRUTINISE AGRICULTURAL LAND OR REVENUE LANDS OR REVENUE SITES/PROPERTIES


THE FOLLOWING DOCUMENTS MIGHT BE REQUIRED for  the  EXAMINATION.

1). MOTHER DEED.

2). SALE DEED/PARTITION DEED/WILL/GIFT DEED/RELEASE DEED/RELINQUISHMENT DEED/COURT DECREE/ANY OTHER RELEVANT DOCUMENTS.

3). RTC FROM THE BEGINNING.

4). MUTATION.

5).RR/SAGUVALI CHIT/GRANT CERTIFICATE/LAND TRIBUNAL ORDER/RRT ORDERS,IF ANY( FULL FILE)

6). ILR/PHODI/HUDBUST.

7). ATLAS.

8). AKARBANDH  & TIPPANY

9). RR BALABAGADA NAKALU.

10). SURVEY SKETCH.

11). HISSA TIPPANY.

12). VILLAGE MAP.(OFFICIAL)

13). FORM NO.9 AND FORM NO.10.(GRAMATANA SITES) ORIGINAL GRAMATANA AS PER VILLAGE & FORM NO.11 SIGNED AND SEALED BY THE EO FOR THE GRAMATANA SITES.

14). PASS BOOK.

15). NOC FROM THASILDAR UNDER PTCL ACT.

16). NOC FROM THASILDAR :FORM NO.7.

17). NOC UNDER 79A AND 79B OF KLR ACT.

19). UP TO DATE TAX PAID RECEIPT.

20). FAMILY TREE ISSUED BY THE REVENUE AUTHORITIES OR VA.

21). ENCUMBRANCE CERTIFICATE FOR THE LAST 30 YEARS.

22). PHOTO IDENTITY CARDS OF ALL FAMILY MEMBERS (IUD OR VOTERS ID), IF IT IS AN ANCESTRAL PROPERTY.

23). IF IT IS A RESALE PROPERTY- SELLERS INCOME TAX RETURNS.

24). O.S/WP/RRT- PLAINT COPY ( FULL FILE) & COMPROMISE PETITION AND ORDER (FULL FILE) IF ANY.

SERVICE TAX


SERVICE TAX SLABS AND PAYMENT DUE DATES

1   In case of Individuals or Proprietary Concerns and Partnership Firm, service tax is to be paid on a quarterly basis. The due date for payment of service tax is the 5th of the month immediately following the respective quarter (in case of e-payment, by 6th of the month immediately following the respective quarter). For this purpose, quarters are: April to June, July to September, October to December and January to March. However, payment for the last quarter i.e. January to March is required to be made by 31st of March itself.

( Refer Rule 6 (1) of Service Tax Rules, 1994)

2     In case of any other category of service provider other than specified at 6.1 above,  service tax is to be paid on a monthly basis, by the 5th of the following month ( in case of e-payment, by 6th of the month immediately following the respective month). However,  payment for the month of March is required to be made by 31st of March itself.      

( Refer Rule 6 (1) of Service Tax Rules, 1994)

3     Service tax is to be paid to the Central Government in respect of service deemed to be provided as per the rules framed.

( Refer Rule 6 (1) of Service Tax Rules, 1994)

4      The facility of e-payment of service tax has been introduced with effect from 11.05.2005. From 1stApril, 2010 e-payment of service tax has been made mandatory for the assessees who have paid service tax of Rs.10 Lakhs (cash+ cenvat) and above during the last financial year or who have paid service tax of Rs.10 Lakhs (cash + cenvat) and above during the current financial year. The e-payment shall be made only in designated banks by 6th day of the following month.

(Refer Rule 6 (1) & (2) of Service Tax Rules, 1994) {List of Banks, authorized to accept e-payment is given in para 12)

5   The assessee is required to deposit the amount of service tax in the designated banks through GAR-7challan.

(Refer Rule 6 (2) of Service Tax Rules, 1994)

 ( Assessees may contact jurisdictional office for details of the designated banks.)

6     While depositing the service tax, the appropriate ‘account head’ pertaining to the particular service category should be mentioned on the challan. The correct accounting heads have been given in the table showing the ‘List of Services’ in para 1.3.

7      If the assessee deposits the amount of tax liable to be paid, by cheque, then the date of presentation of the cheque to the designated bank would be treated as the date of payment of service tax.

(Refer Rule 6 (2A) of Service Tax Rules, 1994)

8       Where an assessee has issued an invoice, or received any payment, against a service to be provided which is not so provided by him either wholly or partially for any reason, or where the amount of invoice is renegotiated due to deficient provision of service, or any terms contained in a contract the assessee may take credit of such excess service tax paid by him, if the assessee:-

          a) has refunded the payment or part thereof, so received for the service provided to the person from whom it was received or

          b) has issued a credit note for the value of the service not so provided to the person to whom such an invoice has been issued

( Refer Rule 6 (3) of Service Tax Rules, 1994)

9     The assessee can opt for provisional payment of service tax in case he is not able to correctly estimate the tax liability. In such a situation he may request in writing to the jurisdictional Assistant / Deputy Commissioner for the same.

( Refer Rule 6 (4) of Service Tax Rules, 1994).

10    Service tax ( including interest, penalty, refund) is to be rounded off to the nearest rupee. 50 paise or more should be rounded off to the next rupee and less than 50 paise should be ignored.

( Refer Board’s Circular No.53/1/2003 dated 11.03.2003)

11    Any person who has collected any sum on account of service tax, is under obligation to pay the same to the Government. He cannot retain the sum so collected with him by contending that service taxis not payable.

( Refer section 73A of the Finance Act, 1994.)

12. Any person providing taxable service to any person shall pay service tax at the rate specified in Sec.66 in such a manner and within such period as may be prescribed.

(Sec.68 of the Finance Act, 1994)

The table below shows the rate of service tax applicable at the relevant period of time.

Sr.No. Period Rate ofService Tax Rate of Education Cess Rate of  Secondary & Higher Education Cess
1. Till 13.05.2003 5% Nil Nil
2. 14.05.2003 to 09.09.2004 8% Nil Nil
3. 10.09.2004 to 17.04.2006 10% 2% of the S.T. Nil
4. 18.04.2006 to 31.05.2007 12% 2% of the S.T. Nil
5. 01.06.2007 to 23.02.2009 12% 2% of S.T. 1% of S.T.
6. From 24.02.2009 10% 2% of S.T. 1% of S.T.

 

OPPORTUNITY FOR FRAUDS, CHEATS, TAX EVADERS, CORRUPT AND TAINTED OFFICIALS AND POLITICIANS AND DESH DROHEES TO DECLARE THEIR ILLEGAL WEALTH & MONEY STASHED AWAY ABROAD!!!!!!! BY ALL, EXCEPT CRIMINALS AND TERRORISTS


GOT ILLEGAL WEALTH, MONEY AND ASSETS – DO NOT WORRY – THE GOVERNMENT MAY GIVE YOU A BREATHER – BRING IN  AND EARN AND ENJOY !!!!!!!!!!!!!!!!!!!!!!!!!!!

VOLUNTARY DISCLOSURE SCHEME TO BRING BACK THE BLACK MONEY @!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 The government is seriously considering the option of a voluntary disclosure scheme” for bringing back unaccounted money kept in banks abroad. VDIS was launched by the finance ministry domestically in 1997 and it helped the government increase revenue collections dramatically.

 It was recommended that an offshore voluntary disclosure scheme may be considered by the government so that taxes could be collected on such monies kept abroad in undisclosed accounts and the assets held by resident Indians abroad.

Under the new scheme, the government may not ask a person the source of the money, but criminal action would be taken if it is proved the money was earned though unlawful activities.

The penalty for non disclosure of income or tax evasion is at 100 to 300 per cent and if a penalty of 100 per cent is imposed on taxable income at 30 per cent, one would be able to retain 40 per cent of the money but still can bring it back.

MISCONCEPTION ABOUT THE MARKET PRICE AND GUIDANCE VALUE


THE SELLERS ARE IN GREAT MOOD HOPING THAT THE PRICES OF THE PROPERTIES HAVE GONE UP WITH THE REVISION OF GUIDANCE VALUE.  THIS IS A MISCONCEPTION. IN REALITY, THERE WILL NOT BE GOOD DEMAND FOR THE PROPERTIES DUE TO THE REVISION AND INCREASE.

THE REASONS ARE:

THE SELLERS HAVE TO PAY ADDITIONAL STAMP DUTY AND REGISTRATION FEE TO THE EXTENT OF THE INCREASED VALUE.

THE SELLERS MUST ALSO HAVE INCOME TAX (ACCOUNTED MONEY) TO THE TUNE OF THE GUIDANCE VALUE.

NORMALLY ALL THE PROPERTIES ARE UNDERVALUED TO EVADE STAMP DUTY AND REGISTRATION FEE AND THE MOST IMPORTANT ASPECT IS THAT THE INCOME TAX DEPARTMENT TREATS OR ASSESSES THE VALUE OF THE PROPERTY AS PER THE GUIDANCE VALUE OR THE GOVT VALUE OR IF THE VALUE OR CONSIDERATION IS PAID ABOVE THE GOVT/GUIDANCE VALUE AND NOT FOR THE VALUE SHOWN IN THE SALE DEED.

IN CASE, IF THE SALE VALUE OR CONSIDERATION SHOWN IS LESS THAN THE GUIDANCE/GOVT VALUE, THE INCOME TAX DEPARTMENT WILL LEVY PENALTY AND ASSESS IT TO THE TAX PURPOSE AT THE GUIDANCE VALUE.

DUE TO THE AFORESAID FACTORS, THE PRICES WILL NOT INCREASE BUT WILL DEFINITELY HAVE A DISCOURAGING TREND. 

WITH THE REVISION ALL THE REVENUE AND(GOLMA)L PROPERTIES WITH( BOGUS) GPA ARE IN QUANDRY.  EVEN, IF THEY UNDERGO SURGERY UNDER AKRAMA-SAKRAMA, THE PENALTY WILL BE BASED ON THE GUIDANCE VALUE.  IF ANY OF THESE GPA PROPERTIES HAD TO BE REGISTERED NOW, IT WILL BE AT THE NEW REVISED GUIDANCE VALUE.

WELCOME- PLEASE SHARE YOUR IDEAS, VIEWS AND OPINIONS ON COMMON SUBJECTS AND ISSUES WITH OTHER READERS ON OUR FORUM


WE INVITE ALL OUR FRIENDS TO SHARE THEIR IDEAS, VIEWS, OPINIONS AND EXPERIENCES WITH OTHERS THROUGH OUR FORUM BY SENDING ARTICLES FOR PUBLICATION ON THE FOLLOWING SUBJECTS:

ENVIRONMENT

SOCIETY

GOVERNANCE

BUSINESS

PROPERTY

INCOME TAX, WEALTH TAX, GIFT TAX, VAT, SERVICE TAX, BBMP TAX, STAMP DUTY, REGISTRATION FEE, PROFESSION TAX AND OTHER ALLIED SUBJECTS

LEGAL ISSUES AT BANGALORE ON PROPERTY MATTERS

FEEL FREE TO FORWARD OR MAIL THE ARTICLES TO US AT ecopackindia@live.com.

THE ARTICLES OR SUBJECTS WILL BE MODERATED AND SELECTED SUBJECTS WILL BE PUBLISHED.

SALE AGREEMENT- STAMP DUTY ON SALE AGREEMENT IS SLASHED TO 0.1% FROM 01-04-2011


THE GOVERNMENT OF KARNATAKA HAS REDUCED THE STAMP DUTY ON THE SALE AGREEMENT OF APARTMENTS FROM 01-04-2011 TO 0.1% ON THE SALE CONSIDERATION,  BUT HAS INCREASED THE STAMP DUTY ON THE JOINT DEVELOPMENT AGREEMENTS.

B KATHA OR B FORM IN BBMP LIMITS


THE BBMP IS ISSUING` B` FORMS OR( B) KATHA AS IS GENERALLY CALLED IS JUST A FORM CREATED UNDER THE 2008, TAXATION RULE, WHICH WILL NOT CONFER ANY RIGHT, TITLE AND INTEREST ON THE HOLDER.  AN ENTRY IN THE REGISTER OF TAXES WILL BE MADE UPON PAYMENT OF TAXES AND THIS FORM IS ISSUED. THIS IS ISSUED TO FACILITATE THE SALES OF PROPERTIES, WHICH HAD LONG BEEN STOPPED.  AS THERE WERE NUMEROUS APPEALS AND PUBLIC OUTCRY FOR HAVING BANNED THE REGISTRATION OF SUCH PROPERTIES, THE GOVERNMENT RELAXED THE NORMS AND ISSUING `B` FORMS.

IT HAS BEEN SAID THAT FAKE `B` FORMS ARE IN CIRCULATION. IN ONE SUCH CASE, THE SR REFERRED IT TO THE BBMP REVENUE OFFICER TO CONFIRM IT AS ORIGINAL BEFORE REGISTERING THE PROPERTY.

 

FAIR MARKET VALUE OF PROPERTIES- UNDER VALUATION WILL BE TAXED UNDER SECTION 56 OF INCOME TAX ACT


FAIR MARKET VALUE OF PROPERTIES FROM 01-10-2009

Effective 1/10/2009, difference of over Rs. 50,000 between fair market value and purchase value of immovable property will be taxed as income from other sources in the hand of the buyer if buyer is an individual or HUF. Property is as defined in Section 56 and includes immovable property,  jewellery, shares and securities, work of art, drawings, paintings etc.

In case seller is a relative as defined in this same section, the difference in value will not be taxed. However, you have to produce to the AO an Affidavit from Seller establishing that he or she is your relative and that the property is being sold to you for a consideration of lower than the market value. This affidavit has to be stamped as per law of the state having jurisdiction of the AFFIDAVIT (not necessarily the same as state where the property is located). the stamp duty and registration of the immovable property is payable at the value assessed by the state of location of the immovable property.

For fair market value:-

1) Value determined by stamp duty officer for immovable property.

2) Gold and silver jewellery value will be as per date of sale of the jewellery . Ditto for Shares and Securities if listed. If not listed, a valuation will have to be carried out for these properties.

3) Works of Art, Drawings and Paintings will be as per value determined by valuation officer and may always be subject to litigation.

This is indeed a double whammy as Government has resorted to double taxation to curb black money menace. The seller of property already has to pay CG Tax based on the value determined by stamp duty officer if higher than sale price. The buyer of the property has to pay the tax on IFOS if aggregate difference on all properties purchased by him + other credits is over Rs. 50,000 in a year.

It may be better if buyer pays fair market value to seller so both will save on taxes.

Buyers are advised to consult  Chartered Accountants before the purchase of properties.