Now, you will now have to deduct tax when you make the payment to the seller if the cost of the immovable property exceeds Rs 50 lakh. The CBDT has notified the new provision of tax deducted at source, or TDS, on immovable property
The rate at which tax is to be cut is 1%, but it would go up to as high as 20% if the seller does not disclose his permanent account number. The provision will apply even when the property has been financed through a bank loan.
Buyer will have to ensure either he himself or the bank deducts tax before disbursing the loan to the seller. The provision will apply in cases where buyer bought an under construction property prior to the provision coming into effect but has to make the balance payment after June One.