Hi, I have purchased a Plot from a NRI Customer for a sale consideration of Rs. 63 Lakhs. As per the IT rules, we should deduct TDS@ 10% prior to making any payment to NRI Customer u/s 195. Since a was not aware about this, I have initially made a advance payment of Rs. 13, Lakhs, I have not deducted any TDS on this payment. The Seller has applied for a Lower TDS Deduction certificate u/s 197 on [deleted] and due to his returning back to the foreign country on [deleted], we have registered the property on [deleted] byn deducting the TDS@ 1% only. The Lower TDS Certificate with 1% TDS for upto Rs. 50 Lakhs is issued by ITO with date of validity as [deleted] to [deleted]. Since the registration date was [deleted], this certificate was not valid and CPC-TDS sent me a intimation u/s 200A/206CB for short deduction of TDS @ 10% and asked to make the TDS of Rs. 6.63 Lakhs. I have written a letter to ITO (International Taxn) to issue the Lower TDS Certificate with Date of Validity from [deleted]. He informed that, it is not possible to make any changes in the Certificate as it was system generated. Upon my request, ha has issued a manual letter with valid date from [deleted] to [deleted]. I have made TDS payment @ 10% along with interest+penalty for the advance payment of Rs. 13 Lakhs. Now, I have received an email from, ITO, Bangalore to make the TDs payment for Rs. 6.63 Lakhs within 05 days or else visit their office along with supporting documents. Kindly advice me on this issue. Regards. Veeresh S
Hi Veeresh
It seems that due to some technical issues in website, all the dates have been removed.
Can you pls repost the question with dates written as 01 January 2018.
Further, please note that in the absence of any lower TDS certificate, you have to deduct the TDS @ 20% plus cess and not @10%.
Hi Veeresh
The dates in the question are missing due to website privacy issues. Please post date as 1 July 2017
TDS under lower deduction certificate shall be applicable for the payments made during the period mentioned in the certificate only.
For all other payments outside the certificate's period, TDS should have been deducted @ 20.6%
1) First of all TDS in case of payment to NRI for purchase of immovable property should be 20% +cess.
2) It seems that certificate was issued after registration of property and date of installment.
3) You can raise your grievance on the income tax portal. Also visit the concerned AO with the challan copy and registration deed of property and copy of lower deduction certificate.
Hi Veeresh,
TDS, in case of payment to NRI for purchase of immovable property is 20% + cess.
You may need to repost the query as the dates have got deleted.
Regards,
Nikhil.
Hi,
Hope you are doing well !
In case of sale of immovable property by NRI, it is mandatory for buyer to deduct 20% (plus applicable surcharge & Cess) TDS on the sale price of the property if capital gain is long term capital gain as per section 195 of Income Tax Act.
So, you have deduct the tds @ 20%(plus applicable surcharge & Cess) as you are not having any lower TDS certificate.
Thanks & Regards,
Payal Chhajed
