Pay 20% TDS, If PAN and Aadhar Not Linked: Normally taxpayers need to pay 1% TDS on property purchased but It can increase to 20%.
As per Section 194IA of Income Tax Act
Section 194IA of the Income Tax Act pertains to the deduction of tax at source (TDS) on payment of consideration for the transfer of immovable property (other than agricultural land). According to this section, if the value of the property being transferred is equal to or exceeds 50 lakhs INR, the buyer is required to deduct TDS at the rate of 1% of the transaction value before making the payment to the seller.
However, if the seller does not provide their Permanent Account Number (PAN), then the buyer is required to deduct TDS at a higher rate of 20% instead of 1%. Similarly, if the seller fails to link their PAN with their Aadhaar number, the buyer will also be liable to deduct TDS at the increased rate of 20%.
It is important for taxpayers to ensure that PAN details are provided and linked with Aadhaar to avoid the higher TDS rate.
You Can Still Link PAN With Aadhar
Last date to link Aadhar with PAN extended by the Income Tax Department but if you missed that date still you can link PAN with Aadhar by paying Rs. 1000 penalty and your PAN will be operative.
If you want to link PAN and Aadhar Now then you can read this article:
Link PAN with Aadhar..
How to Link Aadhar With PAN With Penalty Rs. 1000
SYNOPSIS: Link Aadhar with Pan by Paying penalty of Rs. 1,000. Pan and Aadhar linking date extended. Link you PAN and Aadhar Now by paying Fine. Linking Aadhar with PAN is now mandatory as per the Section 139AA of the Income Tax Act, if you have not linked yet now then still you have a…
What is PAN? What is use of it?
PAN stands for Permanent Account Number. It is a unique 10-digit alphanumeric identifier issued by the Income Tax Department of India. PAN serves as a universal identification key for various financial transactions and is primarily used for taxation purposes. Here are some key uses of PAN:
- Income Tax Filing: PAN is mandatory for filing income tax returns in India. It helps the government track individuals’ financial transactions and ensure tax compliance.
- Identification: PAN acts as an identification document, allowing individuals to verify their identity in various financial and non-financial transactions.
- Opening Bank Accounts: PAN is required to open bank accounts, both savings and current accounts. It helps in monitoring high-value transactions and preventing fraudulent activities.
- Investments: PAN is necessary for investing in the stock market, mutual funds, bonds, debentures, and other financial instruments.
- Purchasing Property: PAN is mandatory for buying or selling immovable properties above a certain threshold value, as mentioned in Section 194IA of the Income Tax Act.
- Applying for Loans: PAN is often required while applying for loans, such as home loans, car loans, personal loans, etc. It helps in verifying the creditworthiness and financial history of individuals.
- Opening Demat Account: PAN is a prerequisite for opening a Demat account, which is used for holding shares and other securities in electronic form.
- Claiming Tax Deductions: PAN is essential for claiming tax deductions and benefits under various sections of the Income Tax Act.
- Government Subsidies: PAN may be required for availing government subsidies, such as LPG gas subsidies, scholarships, and other welfare schemes.
Remember, PAN should be kept confidential and shared only with authorized entities for legitimate purposes.
According to the report, the department found many cases where property sellers’ PAN cards were not linked to their Aadhaar card. In most cases, the PAN cards of the property sellers became inactive because they were not linked to Aadhaar. As a result, buyers whose PAN cards are inactive receive notices after a few months to pay the outstanding TDS on properties worth more than Rs 50 lakh.
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