• What is the TDS u/s 195 for Sale of Agricultural land by NRI?

Hi, 

I am buying a property (4 Acres of Agricultural land) from a NRI friend from same village as myself. This land is about 2kms from the municipal limits of Gudivada (Population of 1.50 lakh). NRI acquired the land via a gift deed from his grand father in 1977.

Below are the details of Transaction.. (Figures in rupees)
1. Can you please advice me how much TDS (including any cess and surcharge) I/buyer have to deduct under section 195 for current FY? Is it 20.6, 20.8? or 22.8 etc..?
2. Is there any benefit for NRI to obtain Lower tax deduction certificate in this case? and How much it will be?
3. What is the actual LTCG tax (irrespective of TDS u/s 195) NRI has to pay?
4. The NRI is willing to reduce the price if surcharge is impacting TDS buyer has to deduct.. Is that the case here?


Cost of 4 Acre land in 1977 as per document - 32,000
Cost of 4 Acre land in 2001 as per Fair market value by Government - 3,20,000
CII adjusted value of 4 acre land (3.17 multipled)- 10,14,400

Sale price of 4 Acre land (January 2022)- (25,62,000*4) = 1,02,48,000
Asked 5 months ago in Capital Gains Tax

1. 23.92% on sale consideration

2. Relief of Rs.3.38 lacs otherwise he has to wait till filing of ITR to claim excess tax paid.

3. Rs.21.12 lacs

4. Sale value cannot be less than the value adopted by stamp authority for payment of stamp duty.

5. Transfer expenses like brokerage etc. can be reduced from Sale consideration

6. Value as on 01.04.2001 can not be more than the value adopted by stamp authority for payment of stamp duty. Upto Rs. 50 lacs there is no surcharge, 50 lacs-1 cr (surcharge@10%), Rs 1cr-2cr (surcharge@15%)

 

For detailed discussion, you may consult telephonically.

Vivek Kumar Arora
CA, Delhi
4408 Answers
527 Consultations

5.0 on 5.0

Hi

 

  1. 29.88%
  2. NRI may apply for the low deduction certificate. The rate of deduction would depend upon the actual tax liability of the NRI.
  3. Approx 18.75 lacs
  4. Surcharge applicability depends on the income of the taxpayer. Surcharge of 10% is applicable if total income is between 50 lacs to 1cr.

Lakshita Bhandari
CA, Mumbai
5638 Answers
763 Consultations

5.0 on 5.0

Tax liability on reduced sales consideration would be approx 18.15 lacs

Lakshita Bhandari
CA, Mumbai
5638 Answers
763 Consultations

5.0 on 5.0

1. 22.88%. Basic tax rate 20%+surcharge @10%+cess@4% on (basic tax +surcharge) on sale consideration i.e. Rs.22.78 lacs

2. Yes. Rs.2.32 lacs.

3. Rs.20.46 lacs

 

I can assist NRI seller in obtaining lower TDS deduction certificate. The entire process is online. 

 

For elaborative answers and detailed discussion, you may opt for phone consultation.

Vivek Kumar Arora
CA, Delhi
4408 Answers
527 Consultations

5.0 on 5.0

1) TDS would be u/s 195 at 22.88% (20% +10% surcharge+4%cess). Surcharge is 10% for total income between Rs.50 lakhs to Rs. 1 Cr

2) NRI can obtain lower deduction certificate to get relief since the TDS should be on sale consideration (-) Purchase price and not on the gross sales. Therefore, it is advisable to obtain lower deduction certificate. 

3) Rs.20.46 Lakhs(22.88% of capital gains)

4) Yes surcharge is applicable here. 

Prerna Peshori
CA, Pune
40 Answers

5.0 on 5.0

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