A recent amendment relating to tax deduction at source (TDS) on transfer of immovable property has become effective from 1 June 2013. Since this requirement applies to all transactions of transfer of immovable property of Rs.50 lakh or more, it would require compliance by and affect a large number of purchasers of such property, including individuals not carrying on business, who are normally not required to deduct TDS. This new provision requires TDS to be deducted at 1% of the price being paid by the purchaser of an immovable property, irrespective of the quantum of capital gains.
Based on this I have a query: If the date of booking of a unit in any residential project is April 2012 and the demand of the seller to make the payment comes after 1st June, 2013, then will the tax be deducted on that particular demand which has come after 1st June, 2013 or will I be liable to deduct tax on the total consideration of that unit, no matter the demand is after 1st June, 2013 or a prior demand for which I have already made the payment (when this rule was not applicable). If this is the case, then I will be paying tax on tax on the basic value plus service tax paid to the seller of the project.
Please clarify.
