From June 1st 2013, when a buyer buys immovable property (i.e. a building or part of a building or any land other than agricultural land) costing more than Rs 50lakhs, he has to deduct TDS when he pays the seller. This has been laid out in Section 194-IA of the Income Tax Act.
The buyer has to deduct TDS at 1% of the total sale consideration. Note that the buyer is required to deduct TDS, not the seller.
No TDS is deducted if sale consideration is less than Rs 50lakhs. If installments are being paid TDS has to be deducted on each installment.
Tax is to be paid on the entire sale amount. For example, if you have bought a house at Rs 55lakh, you have to pay tax on Rs 55lakh and not on Rs 5lakh (i.e. Rs 55lakh – Rs 50lakh). This is applicable even when there is more than 1 buyer or seller.
If you are the buyer, you do not need to obtain a TAN (Tax Deduction Account Number) number.
If you are the seller, you have to provide your PAN or else TDS is deducted at 20%. PAN of the buyer is also mandatory. TDS is deducted at the time of payment or at the time of giving credit to the seller, whichever is earlier.
This TDS has to be deposited along with Form 26QB within 30 days from the end of the month in which TDS was deducted.
After depositing TDS to the government, the buyer is required to furnish the TDS certificate to the seller.
However in the case of NRI the tax deductuble is 20%. So the buyer will deduct 1% on your share of sale proceeds and 20% from your sons share of sale proceeds.