The best suggestion given to all the people who are looking to save on TDS (Tax Deducted on Source) from their income is to take home loan and buy a house. It is said that two purposes are solved at the same time. First is that you have your own house and the second is that you can claim tax savings for the next fifteen or twenty years (depending upon the tenure of your loan).
But there is a small catch to buying home which people are rarely told about. Like any other product there is a fine print of Buyers beware to purchasing homes too. No, it is not related to bank loans or the interest or the condition or the locality of the house. Yes these are important and are known factors about which there have been several discussions and several suggestions have been given by many knowledgeable people.
What I am trying to point out here is something which is rarely talked about. About a clause which is there but never mentioned by the buyers. Builders and promoters tend to have selective amnesia while promoting and selling their houses to the potential customers. It is not their fault and they cannot be blamed for it too. It is the buyer who needs to know their responsibilities as a potential house owner when it comes to paying their taxes related to their house.
There are several taxes which a house owner needs to pay but one of the most important taxes is related to the houses which costs more than 50 lakhs. The rule states that the purchaser of an immovable property is mandatorily required to withhold tax at the rate of 1% from the seller if the cost of the property is more than 50 lakhs. The main point here is that the tax rate of 1% is to be applied on the total amount and not the amount exceeding 50 lakhs. That means if the cost of the house is 75 lakhs then 1% tax has to be considered on the whole of 75 lakhs and not 25 lakhs (which is exceeding more than 50 lakhs). Also it is important that the tax amount that has been deducted should be deposited within 7 working days from the end of the month in which the tax has been deducted.
But this rule does not apply to people who are purchasing rural agricultural land. I can already see awe struck faces which reads “WOW, we never knew about this rule”. Well, now you know about it and sometimes it is better late than never. You can know more details about the TDS obligations by visiting the site www.tin-nsdl.com. Before I end this article let me warn you that if there is a delay in the payment of taxes from your side you will be penalized and the penalty is 200 per day for the number of days that were lapsed.