Key Points
What are the other formalities that I need to comply with while deducting tax at source?.
The provision of Section 194IA requires a buyer of immovable property, other than agricultural land, to deduct tax at source @ 1% of the sale consideration if the sale consideration exceeds fifty lakh rupees..
For the purchase of property from a resident you have to deduct tax at 1% on the sale consideration of the property only if the consideration for the purchase of the property exceeds 50 lakhs but in respect of property being bought from a non-resident no such threshold limit is prescribed and the buyer has to deduct tax irrespective of the value of the property as long as the seller is making profit on the sale...
Moreover, in case of the purchase of property from a non-resident, the buyer is required to deduct tax at source on the amount of taxable capital gains but for property purchase from a resident tax @ 1% is required to be deducted as a whole of the sale consideration..
As far as a procedure to be following in your case is concerned, you have to obtain a tax deduction account number (TAN), even if this is the only transaction, for depositing the tax deducted from payment made to a non-resident, to the credit of the government, whereas in case of purchase of property from a resident seller, you do not have to obtain any TAN number, you just need PAN number of the seller and the buyer...
