Why Harass and Penalise the Buyers?

COMMUNICATION

Chidambaram’s proposal to burden the buyer with the requirement of deducting tax at source at one per cent, where the value of immovable property purchased exceeds Rs 50 lakhs, will be a harassment to most of the individual buyers, for they will have to seek professional assistance to comply with the relative formalities like obtaining the TAN and filing the TDS return. It would be wiser if the seller collects the tax (TCS), instead of the buyer deducting it. In any case, the limit for non-deduction of tax deserves to be raised to Rs 1 crore, considering the fact that a one BHK flat in metros like Mumbai today costs much more than Rs 50 lakhs. At the least, individual buyers could be exempted from this compliance. The FM stated that more often, PANs are not quoted in the agreements (and hence the proposed provision). This is a lame excuse. If PANs are not quoted, the seller and the registering authority could be penalised. And, Chidambaram has conveniently ignored the fact that Section 285BA of the Income-Tax Act requires the registering authorities to report in the Annual Information Report (AIR) purchases and sales of immovable properties valued at Rs 30 lakhs or more. When the information is already made available, why one more provision for the very same purpose? Did he imply that being a government department, registering authorities care a damn to comply with the formality? If so, why penalise the buyers?

V.V. Vijayan
12, Paradise,
Chheda Nagar,
Chembur,
Mumbai-400089