Buying Tanker Water – Take Care – Check for PH, Total alkinity, Total Hardness, Odour, Color and Microbial Parameter Such as E-Coli , Coliform etc.


There is acute shortage of potable water in all the parts of Bangalore due to failed monsoon and continuous two years drought.  The Underground water table has touched down the lowest ebb and the quality of the water pumped is toxic to highly pathogenic.

Therefore, we request all the readers to enlighten the associations, friends and relatives to check the quality of the water before the purchase and at the time of use.

In a rare case, it is found that treated water is being supplied in one part of Bangalore, but yet to be confirmed.

General Checks:

PH, Total alkinity, Total Hardness, Odour, Color, TDS and Microbial Parameter Such as E-Coli , Coliform.

The tanker rates or prices range from Rs.300/- to Rs1,200/- for 6,000 to 7,000 litres depending upon the location and the quality of water.

 

 

REGISTRATION OF PROPERTIES AT A VALUE LESSER THAN THE ACTUAL SALE VALUE OF THE PROPERTY TO EVADE STAMP DUTY AND INCOME TAX


A News Report of real estate transaction in Bangalore Mirror on 13-07-2016

Woman entered into a deal to sell her property, but faced trouble when buyer refused to pay the ‘remainder’ 

The High Court of Karnataka has allowed a 75-year-old property owner to initiate a cheating case against the buyers of her property who allegedly refused to pay her the amount that was negotiated for. The property was registered for a lesser amount than what was mutually agreed, as is the norm with most property registrations. But in this case, the purchaser allegedly refused to pay the ‘remaining’ amount while paying her only the amount mentioned in the sale deed.

An US national came to Bengaluru to sell her property in 2013 and entered into an agreement to sell with  for a consideration of Rs 2 crore. However, this transaction did not fructify. Later, an agent got her a deal to sell the property to one  XXXXXXXXXXXXfor Rs 6,58,20,000. However, the sale deed for registration was prepared only for Rs 4,32,20,000.

The Landlady alleges that she was not paid the difference amount and hence she refused to give up possession of her property.

She complained to the  police that she was being forced to give up possession of the property without the balance amount being paid to her. The police did not register an FIR but gave her an ‘endorsement’ that it was a civil dispute and hence she should approach the court.

Thereupon, she approached a civil court, which refused to give an injunction against the property purchasers and she claimed that she was forcibly thrown out of the property and then approached the HC for justice.

The HC noted that there was “some semblance of criminal intention on their part.” of the buyers,  It also castigated the police for not filing an FIR. “This court is unable to understand as to how the  police could refuse to register the complaint and issue such an endorsement.” The court said the case was unnecessarily being pursued in the civil court.

Relegating the case to the magistrate court  and directing the seller “to file appropriate complaint and seek appropriate direction to the jurisdictional police for investigation and registration of the complaint for the offences alleged against the defendants”, the court also allowed her to proceed against the purchasers to recover the amount due to her.

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REMARKS-

UNDERVALUING THE PROPERTY – STAMP DUTY EVASION – INCOME TAX IRREGULARITY – CAPITAL GAINS – PENAL PROCEEDINGS – REPATRIATION OF FUNDS ABROAD

Income Tax Department might step in along with the Department of Stamps and Registration to conduct an enquiry into the TAX – for the difference amount.  Amount negotiated and the Amount shown in the Sale Deed.  The difference of stamp duty + 10 times the penalty and the Income Tax + Capital Gains + Penal proceedings from the IT Investigation Wing.

If the property is bought for X price and registered it for Y price, to evade stamp duty and Income tax, both the departments will have conduct enquiry and the amount `Y` has to be assessed to tax.

The liability towards the stamp duty is the DUTY NOT PAID OR EVADED on the OTHER amount Plus 10 times the penalty and the income tax (TDS) + recovery proceedings by the IT department.


There are many financial institutions provide home loans and some of them by-pass the RBI directives and assist the buyer and seller to EVADE stamp duty.  This is not very difficult to investigate.  The actual sale agreement is for Rs.1,00,000/- and the loan sanctioned is also on the basis of the sale agreement and 75% or 80% of the value shown in the Sale Agreement.

But, the SALE DEED registered is for Rs.50,000/- by undervaluing the property and EVADE STAMP DUTY.

The penal proceedings:

STAMP DUTY HAS TO BE PAID FOR THE DIFFERENCE AMOUNT OR TAX EVADED AMOUNT OF Rs.50,000/- at the prevailing applicable rates and 10 times the penalty of the TAX EVADED AMOUNT.

If this discrepancy or illegality is brought to the notice of the RBI, the RBI might be compelled to initiate appropriate proceedings against the bank or financial institution and direct the BANK to proceed with the immediate recovery of the amount LENT to the borrower.

 

TAX DEDUCTED AT SOURCE ON THE IMMOVABLE PROPERTIES EXCEEDING RS50 LAKHS


1% TDS IS LIABLE TO BE DEPOSITED FOR THE PROPERTIES VALUED ABOVE RS50 LAKHS, BEFORE THE REGISTRATION OR EXECUTION OF ABSOLUTE SALE DEED.

TDS IS NOT PAYABLE AT THE TIME OF ENTERING INTO THE SALE AGREEMENT.

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

 

PROPERTY VALUE ABOVE RS50 LAKHS ATTRACTS 1% TDS !!!!


TDS – Sale of all Immovable property above sale consideration value of Rs50 lakhs and above is now subject to TDS !!!

The Finance Minister in Finance Bill 2013 has proposed withholding tax at 1% to be deducted by every buyer from any sum payable to the resident seller if the sale consideration for transfer of immovable property, (EXCEPT)/other than agricultural land, is Rs.50 lacs or more.

the Finance Minister has introduced this new TDS provision by inserting section 194IA with the current TDS provisions contained under the Income Tax Act, 1961 (the ITA).

The proposed TDS provision is to be applied to transferor of immovable property, wherein the ‘immovable property’ means:

  • any land (other than agricultural land) or
  • any building; or
  • part of a building.

The proposed amendment will be applicable from 1 June 2013.

similar provisions were also proposed by the Finance Bill, 2012; however the said provisions were not incorporated when the final Bill was passed by the parliament. The current TDS provision which is applicable to sale of immovable property is different than proposed vide Finance Bill, 2012.

Finance Bill, 2012

Finance Bill, 2013

TDS applicable only if

  • Sale consideration equal to or more than INR 5,000,000 for immovable property in specified areas
  • Sale consideration equal to or more than INR 2,000,000 for immovable property in other areas

TDS applicable only if consideration equal to or more than INR 5,000,000

Stamp duty value has to be considered for withholding of taxes where the consideration for transfer is less than the stamp duty value

No such provisions

Proof of withholding of taxes to be furnished to the authority registering the document of transfer of immovable property, failing which the property will not be registered

No such provisions

Purchaser of property is not required obtain Tax Deduction Account Number (TAN) to comply with the above provisions

No such provisions

The limit of Rs.50 lacs will certainly give some respite to buyers in rural areas or non-metro cities.

Further, not linking the sale consideration with stamp duty value for applicability of this TDS provision also relieves a buyer from undue litigation.

This is possibly in line with the intent behind insertion of this provision, to track the transactions at first and then probe further if required.

However, the difficult part is the implementation of this TDS provision that a buyer may have to face which could be as under:

  • Now, every buyer will have to obtain TAN number for complying with the provisions;
  • Deposit the taxes deducted within the specified time limit with the Government;
  • File the quarterly TDS returns and mention the Permanent Account Number (PAN) of seller;
  • Issue TDS certificate to the seller; and
  • May be subjected to scrutiny by the TDS officer

It may also be mentioned that the above rate of 1% may increase to 20% if seller does not provide PAN due to overriding provision of section 206AA of ITA.

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.