• TDS on property with NRI

I intend to buy the owner share e-katha BDA approved plot developed by a developer.
The land 4 acres was originally bought by the mother in 1975. And subsequently the mother got into a JDA with a builder to develop a layout in 2012. Subsequent to the development of the property and getting approvals to convert the property from non agriculture land to aggriculture land in 2013, Some of the plots was allocated to the relatives of the mother. The plot I intend to buy of 1650 sqft was allotted to both mother and daughter. There is no trace of a sale deed from mother to daughter atleast or to any other relative to which share of land has been allotted. The daughter has given GPA to her younger brother to sell the property since she stays in the USA.
Now I am being told that I have to pay TDS of 22%, for the value of share owned by the daughter since she is an NRI the seller is however insisting that its not required and the entire money can be paid with deduction of 1% tds to the mother alone. And I was also shared the PAN of the daughter. The draft agreement shared still listed both mother and daughter as seller. And the same arrangement has been executed for rest of the plots in the property as well. When I consulted with SBI who is processing the loan they advised that 1% TDS is enough with an ROC from daughter that all payments be made to mother. 
Can someone please help clarify this ?
Asked 5 months ago in Capital Gains Tax

Hi

 

If you are making entire payment to the mother, TDS would be deducted @1% only.

Lakshita Bhandari
CA, Mumbai
5638 Answers
763 Consultations

5.0 on 5.0

- As the land was originally bought by the mother and only she had the rights to enter into JDA with the developer, the name of daughter in property papers is out of love and affection. You are liable to pay TDS @1% on the total sale conisderation. 

Vivek Kumar Arora
CA, Delhi
4408 Answers
527 Consultations

5.0 on 5.0

If the seller agreement insist name of daughter as seller then 22% TDS is to be deducted. 

Vidya Jain
CA, Kolkata
974 Answers
55 Consultations

4.8 on 5.0

In that case 1% to be deducted in mother portion and 22% in daughter case. Reason being as per agreement both are seller and you have to comply with Resident and NRI provision accordingly

 

Vidya Jain
CA, Kolkata
974 Answers
55 Consultations

4.8 on 5.0

As the land is entirely financed by the mother therefore she will be treated as owner for all income generated from the property. Hence TDS would be dedcuted in her hand only.

Vivek Kumar Arora
CA, Delhi
4408 Answers
527 Consultations

5.0 on 5.0

Even though the deed contains daughters name, the mother is the owner of the property for capital gain purposes. Moreover, you are making entire payment to mother in only. So, 1% TDS would be applicable.

Lakshita Bhandari
CA, Mumbai
5638 Answers
763 Consultations

5.0 on 5.0

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