TDS is applicable to every property except the agricultural property. Section 194 IA of the Income Tax Act provides that the buyers are responsible to make a payment of 1% of TDS to the government account if he is making a payment exceeding Rs. 50 Lakh to the seller of the property on the transaction of a residential property.
When a property is inherited, a person is not levied with tax under the law. However, he may be made liable to pay capital gain tax in case he sells the property.
The concept of stamp duty was introduced in the late 19th century which made the homebuyers liable to pay a sum of money as tax while they purchase a particular property. In other words, it can be stated as the tax amount that is charged by the state government on the various documents that are required for registration.
The sale of a property invites a tax named the capital gain tax which is levied on the capital gain that is received on the sale of a capital good. The land is a capital good and has appreciable value, hence is taxable.
GST became favorable to the real estate market as the tax rates fell from 12% to 5% and are considered a phenomenal impact on the industry.
The capital gain tax can be for a short term basis or a long term. It is important to note that capital gain is only applied for the sale of the property and not in cases of property transfer such as inheritance, gift, will, etc.
Property tax is the amount that is paid by the landowner to the municipal corporation or the local government for his/her are. The property tax must be paid every year.
Buying a residential property may be a lengthy procedure if you wish to make the best of the process. A buyer should not only consider the charges he is liable to make the seller at the beginning of the transaction but also the amount he is liable to pay as tax.
GST does impact the home loans as at present service charges, and VAT is not charged and GST is charged in their place. The fact that the earlier rate that was applicable was 15% and after the introduction of GST it has been increased by 3% brings in marginal changes on your home loan.
It would be a milestone achievement if you have paid off your mortgage. If your mortgage is paid off, it does not mean that you are freed from the tax liabilities. Every state in India imposes a certain property tax on the owner of the property at a certain rate.