Yes, TDS shall be applicable.
But, if the NRI obtains a No TDS or Lower TDS certificate from the assessing officer, then TDS shall not be applicable or applicable at a lower rate.
Regarding purchase of property from NRI and TDS on payment
Dear Experts, Thanks a lot in advance. I have sold a land and got some money against it. I am buying an apartment in joint ownership (where I am paying 80% and other partner my son paying 20%) from an NRI and paying in NRO account. Please let us know, if there is any TDS and how much ? Also , if there is a TDS then what is the procedure for the same and can seller ask for a refund of TDS from tax department. If seller is investing money to payoff loans of the other house property which he bought as a NRI (but on loan ) then too do I need to deduct tax.. is there any way out to avoid TDS as there is no capital gain for the seller on this property. Please help
Asked 7 years ago in Capital Gains Tax
Hi,
You have to deduct 20% TDS in the sale price while buying property from the NRI. NRI can get refund of excess TDS while filing its return of income.
Alternatively, you can ask NRI seller to take no deduction certificate from the assessing officer. In that case you need not to deduct tax.
Please feel free to call revert in case you need more clarity
Thanks and regards
Abhishek Dugar
CA CS B.Com
Thanks for the quick response. Please let me know the procedure to get the certificate from AO and how complex is this. Also, What all documents required by the seller for the same? Can seller apply for the same while he is not in India? He will come to India after some days when transfer deed is to be signed.
Asked 7 years ago
It all depends upon the assessing officer. Some officer do it very quickly, others take time.
NRI need not to be present. Anyone on his behalf can file the application after taking POA from him.
Hi,
Unfortunately, since you are buying from an NRI, you have the burden of deducting the entire amount of tax due by him. If you are aware of the fact that he will be investing in a new property, then you can take a declaration from him to that effect.
Normally NRI seller applies for the no-tax deduction certificate, but you may as well apply, if required. He can apply through any authorized representative, a chartered accountant or lawyer, etc. The details of the sale and the cost of acquisition of it, along with computation of long term capital gain will have to be stated in the application to the AO. Further, if he is going to invest in another property, then if the details are available, then they have to be provided as well. If there are no details, then he will have to give an affidavit.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Actually He (NRI) is my relative (his wife and my wife are real sisters) and he is not buying any new property from this money , but paying loans of other property. He has no capital gains and we know that (actually due to relations , this sale is being done on no profit basis for seller). I think best way is to take no TDS certificate from AO. Please let me know the list of documents required for the same. Also, we have made half of the payments , if TDS is required then what is the time range for the same from money transaction date.
Asked 7 years ago
Hello,
The document checklist runs in almost 15-20 documents on a case to case basis. It is always better to approach professional to do the same for you or else if you wanna do it yourself you may first approach the Assessing Officer, explain him your case and ask him to give you a print out of the check list as he will be in a better position to first hear out your case and then let you know as to what all documents will he/ she need to process your case.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Hello,
Lower deduction certificate should be dated before the date of making payment.
You will need a number of documents like Copy of PAN of all owners, Property trail documents of all owners, purchase receipts, allotment letter, Occupation certificate, Passport Copy, Proof of being NRI, Entry Exit working in india for last 5 years, last 5 year itr copies, last year all bank copies, housing loan payment proof, to name a few.
It is advisable that you meet the AO beforehand and understand his need before working on the document checklist.
Trust this clarifies.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Hello All, Thanks a lot for your responses. I have some more queries and need your expert opinion on the same. The deal of property is done between a Seller( a NRI) to us (2 person in joint ownership, Resident Indian). Q1. Should Owners, apply for TAN for TDS or PAN will work? Q2. As we two persons are buying property in joint ownership (me and my Father), Should we file TDS separately or any one of us can file on the complete deal amount. Q3. If we need to file separately, How is this calculated i.e. on the basis of the amount paid by each or % of ownership in property or both will file TDS on the full deal amount. For example, I am paying 20 lac and my Father is paying 60 lac out of 80 lac (total amount), So how will TDS be filed by us? Also, In case of NRI, which TDS form to be filled. Please share the link for online filling.
Asked 7 years ago
1. PAN will work.
2. You should file TDS separately
3. Ideally the percentage of ownership should be in the ratio of payment made by each of you. Hence, this question is not relevant.
Hello,
1. You will have to apply for TAN, since the case is of an NRI.
2. TDS has to be filed separately for 2 different share.
3. Percentage of ownership.
4. Form 27Q has to be filed on the traces(nsdl) website.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Hi
1. TAN number would be required.
2. TDS has to be decided by each joint owner on each payment.
3. TDS will be deducted proportionately.
Hi,
1. You do not need a TAN. PAN will do.
2. One of you could do it. The application is to determine the tax liability of the seller, so either of you could do it.
3. Percentage of ownership will depend whether you will be stating anything to that effect in the purchase deed. If not, the law presumes that you and your father will own it equally.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
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