No she doesn’t require TAN
Hello, I am planning to buy a property with my mother as a co owner. Someone told me that she also requires to have tds certificate (so TAN also required) but she is a housewife all her life. Is it correct?
If all payment is to be made by you from your account then it would be you who shall be liable to deduct TDS but if any payment is made by mother and TDS is deducted then she would require TAN.
you are making entire payment , you can deduct the entire TDS and your mother is not required to do so.
-So, she doesn't need to do tds deduction.
-Also, you need not to take a TAN for your mother
- Under the income tax laws, any person responsible for paying money to a resident individual to buy a house or any other immovable property , except an agricultural land, shall deduct tax at the time of making payment. TDS @ 1% must be deducted if the payment amount is Rs 50 lakh or more.
- Further, neither the buyer nor the seller is required to procure the TAN for making TDS payment on the purchase of the immovable property.
- However, it is mandatory for the buyer and the seller to provide his PAN details at the time of deducting TDS on the purchase transaction.
Thank you so much for the reply Sir. Just for information I am an NRI and I am buying the floor from a NRI property holder. My friend is saying that our case is very different. Nri's liable 32% tds normally but we have applied for dispensation with income tax department under a certain clause. This dispensation to pay only 2% tds comes from IT department in form of tds certificate which is issues in name of buyer. I already have the tds work done under my name but now he is insisting to get it done under mother's name which will take another 3-4 weeks but I didn't find any merit in this. Please advise.
The entire sale consideration is being paid by you .hence you can deduct entire TDS
had your mother been making any payment then she would have to deduct TDS
Your mother being a co-owner she is equally responsible for tax to be deducted at source.
Before making a payment to the seller, buyer has to deduct tax at the time of purchasing property. While making a purchase of the property, the buyer has to deduct tax before making a payment to the seller.
o deposit the TDS, each buyer has to own the legal documents, especially the Permanent Account Number (PAN). However, the buyer is not required to own a Tax Deduction Account Number (TAN). TDS is deducted at a 1% rate, but if the seller does not have PAN, the deduction rate goes up to 20%
Multiple Buyers: In case there is more than one buyer, then each buyer shall deduct TDS from his share of sale consideration. However for the purpose of eligibility of TDS provisions, total value of the property shall be considered.
If a property has more than one buyer and/or seller, you need to fill in separate Form 26QB for each set of buyer and seller. The details of all buyers and sellers, have to be submitted in each Form 26QB. So,you need to file form 26QB for each buyer .
The seller’s capital gains would get calculated by the income tax department and would provide the certificate for nil or lower deduction of the TDS relied on the capital gains which comes from the property sale.
The seller is needed to furnish the same certificate to the buyer and the buyer would deduct the TDS under the rates given in the income tax certificate.
Towards the case, this certificate is not taken via seller from the income tax department. The TDS must be deducted from the total sale price and not on the capital gains. Thus it is crucial for the seller to get the certificate from the income tax officer.
As an NRI buying a property with your mother as a co-owner, it's important to consider the relevant tax regulations and consult with a qualified tax professional or chartered accountant who specializes in NRI taxation to get accurate and up-to-date advice based on your specific circumstances. They will be able to guide you through the process and ensure compliance with the applicable tax laws.
Regarding the TDS (Tax Deducted at Source) certificate, it's generally required when purchasing property from an NRI seller. The TDS rate for such transactions is typically 20% (plus applicable surcharges and cess) as per the Income Tax Act. However, there may be provisions for lower TDS rates or exemptions based on specific circumstances or if the buyer has obtained a certificate for a lower deduction or exemption from the Income Tax Department.
The requirement for a TAN (Tax Deduction and Collection Account Number) typically applies to entities that are deducting or collecting tax at source. In the case of individuals, a TAN is generally not required unless they are conducting business or professional activities that mandate TDS compliance.
Regarding the specific advice given by your friend about obtaining the TDS certificate in your mother's name, it's crucial to consult a tax professional who is familiar with your situation and the dispensation you have applied for with the Income Tax Department. They will be able to assess whether it is necessary or beneficial to obtain the TDS certificate in your mother's name, taking into account the applicable regulations and the specific dispensation you have sought.
In summary, consulting with a qualified tax professional is strongly recommended to ensure that you understand and comply with the tax obligations associated with purchasing property as an NRI. They will be able to provide personalized advice based on your circumstances and guide you through the process of obtaining the necessary TDS certificate, if required.