Mumbai, December 6, 2023: Are you buying property worth Rs 50 lakh or more? Stay alert! While you might be diligent about linking your Aadhaar and PAN cards, it’s equally crucial to ensure the seller has done the same. Otherwise, you could face a hefty tax burden.
The Standard vs. the Unexpected
Under the Income Tax Act, property buyers are expected to deduct 1% TDS (Tax Deducted at Source) on transactions exceeding Rs 50 lakh. The remaining 99% is paid to the seller, who claims it as credit later.
The Problem: Recent actions by the Income Tax Department have revealed a critical issue. Buyers are receiving notices to pay a staggering 20% TDS due to non-compliance with Aadhaar-PAN linkage by the property seller.
Expert Advice: Chartered accountants and other professionals like brokers and contractors urge property sellers to link their PAN with Aadhaar immediately. This simple step can save everyone involved from unnecessary hassles and financial implications.
Consequences of Unlinked PAN: In several cases, a seller’s PAN becomes inactive due to the absence of Aadhaar linkage. This triggers notices for property buyers, demanding they clear a 20% TDS on purchases exceeding Rs 50 lakh.
Buyer Vigilance is Key: To avoid such unexpected financial burdens, property buyers must be vigilant. Before finalizing a purchase, ensure the seller’s PAN is active and linked to their Aadhaar. This simple precaution can protect you from unwanted tax liabilities and ensure a smooth property transaction.
Remember, due diligence is crucial in any property transaction. By staying informed and taking the necessary precautions, you can protect your finances and ensure a hassle-free buying experience.
(Source: ET Realty)