TDS on property purchased from NRI

Hi

TDS rate shall be 20% plus cess.

It would be applicable on the sales consideration.

Yes, TAN Shall be mandatory.

TDS shall be deducted under section 195.

Hello,

TDS is to be deducted at 20% + cess if the NRI is liable to Long Term Capital Gain and on slab rates if he is liable to Short Term Capital Gain.

TDS would be on the sale amount and not on capital gain but the non resident can apply for lower deduction certificate and then tds would on the lower figure. The same can be applied online through Form 13.

TAN  registration would be required for tds deduction u/s. 195. TDS return form is 27Q.

I hope that this answer satisfies your requirements. For further understanding, you can contact us directly or take a phone consultation.

Regards,

CA Hunny Badlani

Hello Sir,

Here are the replies for you questions:

1. In the case mentioned by you applicable TDS rate would be 20 percent. 

(If the property is sold by NRI with a period of less than 2 years from the purchase date then the rate will be 30 percent)

2. TDS will be calculated on sale consideration. So I'm your case it will be calculated on 93 lacs. So TDS will Be - 20%*93,00,000=18,60,000

3. Yes for depositing the TDS you are required to obtain the TAN number under section 203A of the Income Tax Act, 1961.TAN can be obtained by applying buy filling up the Form 49B.

4. Yes, NRI can apply for TDS lower deduction certificate.

Following documents are required for the same: 

(a) Passport

(b) PAN

(c) Sale Agreement / Sale Deed

(d) Income Tax Returns

(e) Bank Statement

(f) Any other document deemed relevant

5. TDS must be deducted at the time of making the payment to the NRI. The information about the TDS being deducted and the rate at which it was deducted should be mentioned in the sale deed between the NRI seller and the buyer.

The TDS deducted by the buyer should be deposited through challan under sec 195 for TDS payment on or before the 7th of next month in which the TDS is deducted.

TDS return will be filed for the same under FORM NO 27Q.

Thanks and Regards

Divya Chugh

Hi,

-The TDS rate shall be 20% plus applicable surcharge & cess.

-It would be deducted on sales price.

-Yes, TAN is mandatory.

-Yes, NRI can apply for low rate/nil rate certificates.

-It should be u/s 195.

- Rate of TDS is 22.88%.

- Sale price.

- Yes

- Yes online through Form 13 

- Section 195, Form 27Q.

TDS needs to be deducted keeping in mind section 195, if its long term capital gain TDS shall be deducted @20% on selling price and 40% of selling price in any other case.

If the seller wants deduction only on capital gain part he needs to apply before assessing order and ask for an order which mentions the amount of capital gain and rate of tax.

Yes NRI can apply for lower rate u/s 197.

Section 195, Form 27Q.

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Thank you.

Hello Sir,

- The tds rate would be 20% plus cess.

-It would be payable on sales consideration.

-Yes, TAN is mandatory.

-It would be deducted u/s 195.