There was a news about TDS on SEZ land acquisition in the Ecnomica Times dated 2nd July 2008.
Extract of the news is Given below:
SEZ Land Acquisitions Under I-T scanner,TDS on payments made for purchase of land for these projects
Land acquisition by special economic zones (SEZs) has come under tax scanner. The income tax department has upped the ante on tax deduction at source (TDS) on payments made for purchase of land for these projects. Inspections and surveys by the I-T department have revealed that in several recent SEZ land transactions, there was no deduction of tax. TDS in such cases has to be deducted at the rate of 1% for payments exceeding Rs 15 lakh.
Though most companies that plan to set up a SEZ largely acquire land on their own, they also form a special purpose vehicles (SPVs) with state agencies or even acquire land through these bodies. Any such entity buying land has to deduct tax while making payment when the sale deed is registered. Besides, these project implementing authorities, public utilities implementing projects under fast-track
authorities will be under the watch in cases where implementation is not done directly by the state government.
authorities will be under the watch in cases where implementation is not done directly by the state government.
LANDING IN TROUBLE
I-T dept surveys reveal no deduction of tax in several recent SEZ land transactions
TDS has to be deducted at the rate of 1% for payments exceeding Rs 15 lakh
Public utilities implementing projects under fast-track authorities will be under watch
Most cos largely acquire land on their own, but they also form a SPVs with state agencies
I-T dept surveys reveal no deduction of tax in several recent SEZ land transactions
TDS has to be deducted at the rate of 1% for payments exceeding Rs 15 lakh
Public utilities implementing projects under fast-track authorities will be under watch
Most cos largely acquire land on their own, but they also form a SPVs with state agencies
TDS on SEZ land acquisitions issue figured at the annual conference of chief commissioners and directors general of income tax. Officials have been instructed to specially watch out for such transactions for additional revenue mobilisation in the current fiscal, sources told ET.
The move comes close on the heels of the some state governments questioning the centre's stamp duty exemption for such land purchases through provisions in the SEZ Act. States like MP and Orissa have written to the Centre, seeking a clarification on the issue. There has been an increased focus on the TDS by the I-T department, which created a separate directorate to monitor collections under this head. The government's TDS collections grew by 51% in 2007-08 to Rs 1,06,700 crore from a mere 2.36% in 2004-05. The total tax collection in the fiscal stood at Rs 3,14,486 crore.
By: Deepshikha Sikarwar From Economic Times, July-01-08
Now my query is :
Under which section or provision of Income Tax Act or any other Act the TDS is applicable?
Can someone help on this matter.
CAclubindia
