Buyers Alert! Pay Hefty Taxes on Homes Over 50 Lakh

Bangalore:  Now home buyers have a reason to worry while buying luxury homes. Which means home buyers who have already booked under-construction apartments that cost over 50 lakh will have to pay 1 percent TDS and this hefty tax burden is expected to come into effect from this June. Home buyers required to pay 1 percent of the deal value as tax which will be applicable after June 1.

Lakhs of people are expected to get ownership of their dream homes in 2013 which means lakhs of home are likely to be delivered this year, according to Property research firms Liases Foras and PropEquity as well as property consultancy CB Richard Ellis, reports Deepshikha Sikarwar of Economic Times.  

As per the new Finance Bill 2013, purchaser of an immovable property, other than agricultural land, worth more than 50 lakh, has to pay taxes at the rate of 1 percent from the consideration payable to a resident seller. This idea is to ensure that the property deals are reported and the same rule is applicable for buyers who are acquiring ready property.

The guiding philosophy of this idea was to ensure property deals are reported, and it was believed that the rule will apply to ready property acquired.

"Tax will have to be cut from the total consideration and not balance payment made after the enforcement of the finance act," said an income tax department official.