Budget 2012: If you buy a house, you will be FM's tax collector

The Finance Minister in his Union Budget speech on Friday proposed the imposition of TDS (tax deducted at source) on the transfer of immovable properties (other than agriculture land) at the rate of 1 percent for deals worth more than Rs 50 lakh in urban areas and Rs 20 lakh in other areas. The change is expected to be implemented from 1 October, 2012. As per the proposed plan, the buyer has to deposit 1 percent of the sale value  as TDS.  “It is proposed to insert a new provision to provide that every transferee, at the time of making payments or crediting any sum by way of consideration for transfer of immovable property (other than agricultural land) shall deduct tax at the rate of 1 percent”, according to the budget memorandum.  The TDS has been imposed essentially to ensure that property transaction details are captured by the registrar,  Om Ahuja, CEO, Residential Services at Jones Lang Lasalle, a real estate consultancy told Firstpost. In other property-related proposals, the tax rebate of 1 percent on housing loans up to Rs 15 lakh has been extended for another year. Low-cost homes were also kept out of the service tax net. Read the proposal here.