• TDS deduction and capital gain on property sale

Hi,

I sale property at Meerut on 6th June, 2018 (Inherited from Parents, purchased in year 1968, Residential land ) worth 1.1 CR. Buyer deducted TDS 1% on sale of Property.

Following documents are handed over to me by Buyer:
1. Photo Copy of E-stamp (Sale Deed).
2. Challan Photo Copy of TDS deducted by Buyer.

My question are as follows:

1. What all other documents I need as a seller to claim TDS and how much time does it take to get 
 the refund?
2. Do I need copies for PAN and ADHAR CARD of Buyer and for what purpose?
3. Buyer RTGS Sell amount to my regular saving account, Can I make Fixed Deposit with bank of the 
 amount?
4. Is selling Inherited property (Residential, purchased in year 1968) comes under capital gain, If 'Yes'
 then how much time I have to invest in other property, capital gain accounts or Bonds. Property sale 
 6th June 2018.
5. If sale of property comes under capital gain then do I need to invest all property sale amount?
Asked 3 years ago in Capital Gains Tax

Hi,

Please refer to the replies inline below:

1. The TDS deducted by the buyer shall reflect in your form 26AS and that is sufficient proof to claim refund. The refund can be claimed after filing the tax return. Since the property was sold in this financial year, the tax return shall be filed next year.

2. You do not need his PAN and Adhaar card as such. But if you want to keep it for your records or future perusal, then you may take it.

3. Make the fixed deposit only if there are no capital gains.

4. Yes , selling inherited property shall also be taxable under the head capital gains. You need to invest in the bonds within 6 months period.

5. First of all, since it's an inherited property, you would need the valuation of the property as on 2001-02. Post that, indexation will be done and capital gains will be computed. After valuation, it tmay also be possible that there are capital losses. In such case you would not be required to invest it anywhere.

Thanks

Damini

Damini Agarwal
CA, Bangalore
384 Answers
31 Consultations

5.0 on 5.0

1) TDS credit will be reflected in your Form 26AS and you can claim it on the basis of Form 26AS at the time of filing of ITR i.e. A.Y. 2019-20. Buyer will provide you Form 16B.

2) You can ask for PAN and Aadhaar copy of buyer for future reference if required.

3) To save capital gain tax, you need to either purchase or construct residential property within two or three years from the date of transfer. You can keep in FD for some time.

4) Yes it comes under capital gain. Calculate the capital gain amount first. You can invest in bonds up to 50 lacs. You need to invest only capital gain amount.

Thanks

Vivek Kumar Arora
CA, Delhi
4063 Answers
338 Consultations

5.0 on 5.0

Hi,

1. You will need TDS certificate also which your buyer will give you in sometime. For the time being, challan is enough. Refund will come approx. By September to December 2019, if eligible.

2. You can take it for security purposes. In case, your TDS does not show you can complain to his AO through his pan.

3. If you want to avail exemption from capital gain tax, you need to deposit the amount in special cgds account before return filing date I.e. July 2019. Till then, you can keep money wherever you want.

4. Yes, capital gain tax is liable. If you want exemption, you need to invest entire sale proceeds.

5. Yes, assuming the old property was not a flat/ home and it was merely a land.

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hi

1. Please obtain Form 16B from the buyer. Refund shall be claimed at the time of income tax return filing for FY 18-19 I.e. By 31st July 2019.

2. No.

3. You can, in case you are not looking for other tax saving options.

4. Yes, it is a capital gain. You can invest in bonds upto 5th Dec 2018/ buy a residential house property upto 5th June 2020/ construct a residential house property upto 5th June 2021.

If investment in property is not done by return filing i e. 31st July 2019, amount of capital gains have to be deposited in capital gain deposit account.

5. You need to invest only the capital gain amount and not the entire sale proceeds if the property was a house property. If it was only a residential land, entire sale proceeds shall have to be invested to claim capital gains exemption. Capital gain shall be calculated by deducting indexed value of stamp duty value of property as on 1.4.01 from the sale proceeds.

Lakshita Bhandari
CA, Mumbai
5460 Answers
539 Consultations

5.0 on 5.0

Hi,

Please find below response to your queries:

1. Form 26 AS will reflect the Tds deducted. There is no need for further proof. The refund can be claimed after filing the tax return.

2. Not necessary

3. You can invest the money wherever you want if there are no capital gains.

4. Yes. You need to invest in the specified bonds within 6 months period. You can also invest in a ready to move in house property within 2 years or an under construction property within 3 years of the sale.

5. If there is a capital gain you only need to invest the capital gains and not the total sale proceeds.

Thanks and regards,

Nikhil.

Nikhil Khanna
CA, Mumbai
1428 Answers
19 Consultations

4.8 on 5.0

Hi

Please find below point wise reply of each of your query

1) If the TDS deducted by buyer in your 26AS then you don't need to carry any documents, else challan copy is sufficient

2) you don't need as such

3), 4 & 5) you are free to use this money as there is no restriction in law, further if you want to avail benefit from capital gain you can deposit your money in capital gain account on or before due date of filing of return i.e. 31 July 2019 or purchase a new residential house one year before from such sale or 2 year after such sale or can construct new property after 3 year from such sale. To avail this benefit you must have only one or less residential property.

Further you can book an call appointment to understand better as its required calculation to derive capital gain tax.

Regards

CA Varun Chawla

Varun Chawla
CA, Ghaziabad
74 Answers
1 Consultation

5.0 on 5.0

1.Tds deducted will be reflected in your 26 AS,can be claimed while filling return.

2.No need for pan and aadhar for claiming refund.

3.yes it comes in ambit of capital gain,you have to invest capital gain amount only(full sale proceeds if residential polt) .Investment can be done in bonds or residential property.

You need to compute capital gain ,for that you sholud get property value as on 1.4.2001

Hope it clarifies

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

1. Documents required to satisfy TDS on property:

a) Form 26QB (TDS Challan)

b) Form 16B (TDS Certificate in Property Case)

2. Capital Gain

No Capital Gain and investment of capital gain amount either in capital gain account or purchase of residential

property.

S S Rawat
CA, Ghaziabad
36 Answers
1 Consultation

5.0 on 5.0

Hi,

 

- Purchase new property within 2 years from the date of sale i.e. by 06.06.2020. Till then deposit the amount in capital gain account scheme. For exemption, you need to invest in capital gain account only and not in regular Fixed deposits.

- Deposit the amount before filing of ITR for A.Y. 2019-20. Deposit as soon as possible.

 

- Interest will be taxable.

- Time available for investment in bonds is lapsed.

 

Thanks

Vivek Kumar Arora
CA, Delhi
4063 Answers
338 Consultations

5.0 on 5.0

Hi

1. You can't invest in bonds now. CGDS upto 31st July 19.

2. No, you don't need to deposit interest earned.

3. Capital gain exemption shall be available only if amount is utilized for purchasing a new house property within 2 years of sale of the property. The time limit is 3 years if you want to construct a new house property.

If you're investing after the above time limit, capital gain tax shall have to be paid.

Lakshita Bhandari
CA, Mumbai
5460 Answers
539 Consultations

5.0 on 5.0

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