My wife runs a business with a turnover of Rs 35 lakh with business income of Rs 1,25,000 and commission income of Rs 7,50,000 per annum. She is buying a flat of about Rs 75 lakh. Should she deduct TDS for the property? She is paying commission too for which she is not deducting TDS as our auditor says that we do not require to deduct TDS as the turnover is below Rs 60 lakh per annum. Should we deduct TDS for the property and also for the commission paid?
– Prakash Bhandari
As per the income tax provisions, the buyer of an immovable property exceeding Rs 50 lakh has to deduct a tax of 1% on the total sale consideration (i.e. purchase price) before making the payment to the seller. The buyer must deposit this 1% TDS to the government by online payment on Form 26QB. Hence, TDS has to be deducted on the purchase of property amounting to Rs 75 lakh.
As per the income tax provisions, an individual carrying on a business with a turnover exceeding Rs 1 crore in the financial year immediately preceding the year in which such commission is being paid, is required to withhold taxes at prescribed rate at the time of payment, subject to certain exceptions. Since, turnover is less than the prescribed limits, there is no requirement to deduct tax at source on the commission paid.
My uncle completed 80 years in November 2016. Is he eligible for super senior citizen benefit for FY2016-17?
– Vinod Rathe
As per income tax provisions, a person who has attained an age of 80 years or above on any day during FY 2016-17 (including the date 31st March, 2017) will be considered as Super Senior Citizen for FY 2016–17 and onwards. Accordingly, the person will be eligible for all the Super Senior Citizen income tax benefits.
The writer is tax partner & India Mobility Leader, EY. Send your queries to firstname.lastname@example.org