Charges such as club membership fees, car parking fees, electricity and water facility fees, maintenance fee, advance fee, etc. will soon need to be added into the cost of buying property amount while determining the amount of tax to be deducted at the time of making property. This amendment will come into effect from September 1, 2019.
Currently, these charges were excluded while calculating the amount of tax to be deducted at the time of making payment for property. Only amount paid for buying a house is considered to determine the amount of tax to be deducted.
Shalini Jain, Tax partner, EY India says, “A buyer is required to deduct TDS at the rate of one per cent of purchase price while purchasing an immovable property of more than Rs 50 lakhs. Effective 1 September 2019, the limit of Rs 50 lakhs would be towards consideration of the immovable property including all other charges incidental to the purchase of immovable property such as parking fee, society fee, club membership fee paid by the buyer. Earlier, due to lack of clarity, the limit of Rs 50 lakhs was considered towards the purchase price of the immovable property only and such additional charges were not considered.”
As per current income tax laws, TDS has to be deducted at one per cent by the buyer if the value of property exceeds Rs 50 lakh.
