TDS for buyer purchasing flat from NRI

Hi

1 seller  have to apply to income tax Department u/s 197 for lower deduction of Tds 

2 Tds applicable on total sale value 

3 you have to pay Tds on payment basis 

4 Property age not make any difference in TDS rate ( for getting lower deduction certificate it’s relevant)

5 sale deed value is relevant for this you have to produce same amount sale agreement ( generally two agreements made one for bank if loan apply and other for registration)

6 you have to apply for TAN NO 

7 nri persons representative ie CA/ advocate can do all things on his/her behalf 

8 yes Registered GPA case is considered

9 Yes you have to mention mode of amount paid to seller thus Tds amount reflects in sale deed 

The NRI needs to meet his local income tax officer and get the certificate from him which would include the amount of capital gain and based on that you need to deduct TDS.

Yes you can go ahead even if he is not successful in giving you TDS certificate you need to deduct TDS @30% on total sale value.

If he gets sale value then 20% on capital gain otherwise 30% on sale value.

You need to start deducting TDS on every payment.

Capital gain depends on circle rate and sale deed value whichever is higher.

Only deducting TDS properly is the main issue you need to keep in mind while purchasing property from NRI.

That's depends on the authorised representative he is appointing in India.

Yes obviously the payment/ sale deed value includes TDS value for eg: if sale value is 50 lakh and TDS is 5 lakh then you will mention in sale deed that 45 lakh were paid by cheque and 5 lakh TDS.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

1. Seller will have to file an application to the assessing officer. I am assuming you are talking about low/ Nil TDS certificate.

2. Yes

3. Total sale value

4. Registration or payment of funds to NRI whichever is earlier

5. TDS is @20% (plus surcharge and cess) of sales consideration in case of NRI unless seller get a NIL/ low TDS deducrion certificate. It does not depend upon the age of flat.

6. Capital gain will be calculated on actual sales consideration i.e. higher value.

7. Nothing from tax perspective. If you are paying money in a foreign bank account then,you may need to file form 15CA/ CB

8. Not required

9. Yes, with the help of any CA 

10. Not necessarily

Hi,

Hope you are doing well !!

Please find below the responses :

1. In case NRI seller produce NIL / Lower Tax Deduction Certificate under section 195 or Tax Exemption Certificate the applicable TDS rate will be as per certificate issued by the income tax department. The original certificate will be retained by the buyer. To obtain NIL / Lower Tax Deduction Certificate under section 195 or Tax Exemption Certificate is sole responsibility of NRI Seller. In many cases, i observed that buyer is doing all the running around for this certificate.

2. Yes, you can proceed further.

3. Total Sales Value.

4.  Tds needs to be deducted on each payment.

5. 20% plus applicable surcharge and cess.

However, it doesn't depend on age of flat.

6. Actual sales consideration.

7. You will have to apply for TAN no.

8.No.

9. Yes 

10.No.

Thanks & Regards,

Payal Chhajed

Hi,

- It can be applied online.

- Yes you can.

- Deduct as per certificate.

- On the date of registration

- After certificate, you need to deduct TDS as per certificate rate only.

- Sale deed. If sale agreement is more than sale deed, it would create problem in future. Please ensure sale deed value should be atleast guidance value.

- Collect visa, passport copy, ID proof, residential address in india (any relative) from NRI.

- CA can apply on his behalf subject to POA in his name.

- Yes

- Yes

Thanks

Since the property is held for more than 3 years, the seller will have long term capital gains from this sale. 

Seller should approach the income-tax officer and get a certificate on tax applicable on capital gains.  The seller gives this certificate to buyer for deducting the tax on capital gains earned by seller.  IF seller fails to get certificate TDS should be done at 20%+surcharge +cess on the total sale price and not gains. Even if seller does not get certificate you can purchase property by deducting tax on sale value.  TDS should be done at the time of making payments. Even if any advance is paid, TDS is applicable. Registration has no relevance with TDS.  TDS Should be done on entire sale value. NRI can assign a Power of Attorney to his Chartered, he is not required before the tax officer.  It is advisable to maintain TDS details in agreement.

Dear Sir,

1. The seller or the buyer of the property can apply to Income Tax Officer (ITO or higher rank depending upon the value of the transaction) seeking lower or NIL TDS certificate. The application is to be made to the concerned ITO, International Taxation wing of Income Tax department. 

It can be applied online.

2.Yes.

3. Total sales value.

4.It should be deducted payment wise. 

5.20%+surcharge +cess.

6. It should be calculated on actual sales consideration.

7.Everything should be property documented.

8.No, he can authorise any CA to represent on his behalf through power of attorney.

9.Yes.

10.Yes.

HI

1. Seller have to take certificate from Assessing officer .

2.Yes

3.On Total sales consideration

4.As Soon as you do the payment

5.20.6%. nothing to do with the age of flat

6.Actual Sales consideration .

7 to 10. It is advisable to appoint a CA of that place and authorize him.He will take care of all other formalities like TAN requirement,15ca/cb and other relevant documents to complete transaction.

Hope it helps