CM demands to immediately withdraw the provision of TDS on transfer of immovable property
The provision of TDS is against the interests of people and will adversely affect the federal structure of the country: Narendra ModiIn a letter written to the Prime Minister Manmohan Singh today the Gujarat Chief Minister Narendra Modi demanded to immediately withdraw the tax deduction at source (TDS) on the transfer of immovable properties. Mr. Modi said the newly introduced provision of TDS is against the interests of people and would adversely affect the federal structure of the country.
Mr. Modi said that he has drawn the attention of the Prime Minister about a number of decisions which have been taken by the Central government, adversely affecting the federal structure of the country and autonomy of the States.
The recent Budge has proposed to insert a new provision that every transferee, at the time of making payment or crediting any sum by way of consideration for transfer on immovable property, shall deduct tax at the rate of 1% of sum, if the consideration paid or payable for the transfer of such property exceeds – (a) Fifty lakh rupees, in case such property is situated in a specified urban agglomeration, or (b) Twenty lakh rupees, in case such property is situated in any other area.
The Chief Minister said that by introducing such a provision, it appears that the government of India intends to collect tax at the earliest point of time. Government of India may also be intending to have a reporting mechanism of transactions in the real estate sector.
Mr. Modi said that while introducing such an amendment the Central government has only considered the aspect of tax revenues for its exchequer. It has not considered its adverse implications on other stakeholders.
This will lead to unnecessary harassment to the people at large. It would result in enormous delay in getting the documents registered. Since the proposed procedure involves proof of deduction and payment of TDS, it would complicate the entire procedure and result in delayed processing for registration of the documents, Mr. Modi said.
Dealing with two separate authorities for registration of documents would add to the problems of people. It will also affect the realization of the Stamp Duty, which is an important part of State’s revenues, he said.
The Chief Minister has also pointed out that the Centre has not even cared to consult the States on such a vital issue which affects the common man and also the State’s finances in a big way. It is very clear that to ensure its own income, the Government of India has, once again, overlooked the nation’s federal arrangements, he said.
The Chief Minister asked the Prime Minister to personally intervene in the matter to ensure that this budget proposal is withdrawn immediately.