Taxation on Sale of Property by NRI’s (Non Resident Indians) is bit confusing subject. This confusion is caused due to lack of information and improper explanation. Sometimes it is in the interest of few professionals to complicate things and confuse NRI clients to maximize their gains. In most of the cases, i observed that neither buyer nor NRI seller are aware of what to do. Let me admit that Income Tax Act is not that complicated but it is in the hands of people who interpret it to make it complicated or simplified. To start with, Selling of property by NRI is taxable under u/s 195 of the Income Tax Act, 1961. I will discuss how to deduct TDS u/s 195 in my future post. This post is dedicated to my NRI friends who would like to know about their TDS liability at the time of sale of Property in India. Let me clarify most common confusion first, TDS of 1% u/s 194IA is not applicable if seller is NRI. TDS u/s 194IA is only applicable for resident Indian sellers. It is quite unfortunate that most of my NRI clients lost money as TDS was deducted under both the sections i.e. section 194IA and 195. As this subject is quite comprehensive therefore i will discuss it in 2 parts. In my next post, i will discuss How NRI’s can Lower TDS on Property Sale?. In this post i.e. NRI’s and TDS on Sale of Property we will understand the basic concept of TDS. I will try to keep this post very simple as there is a common perception that this subject matter is complex :).
Broadly speaking any NRI selling a property in India, there are 3 main points related to taxation as per income tax act, 1961
(a) Capital Gain Tax from Sale of Property: Long term capital gain tax will be 22.66% if NRI is selling a property in India after holding it for more than 3 years. In case holding period is less than 3 years then Short Term Capital Gain Tax will be applicable as per income tax slab. In case of short term capital gain, TDS applicable will be 33.99% irrespective of tax slab of the NRI. Not many people know that Capital Gain Taxation is same for both Resident Indians and NRI’s but only difference is in calculation and deduction of TDS. If you wish to know more on these 2 types of capital gain tax then you can check my post on Long Term Capital Gain and Short Term Capital Gain. Basically, the key concern of Income Tax department is that any capital gain arising out of sale of property in India then corresponding income tax should be paid in India. For resident indian seller, as he is staying in India therefore he does not have any other option but to comply with income tax rules and regulations. Since NRI is staying outside India therefore it is very difficult to ensure capital gain tax compliance after the property transaction is completed. In order to ensure compliance, Income Tax Department came out with an innovative idea to ensure that buyer deduct TDS at the time of making payment to NRI seller. TDS u/s 195 is deducted only to ensure capital gain tax compliance.
(b) TDS u/s 195: In case of sale of property by NRI, it is mandatory for buyer to deduct 20.66% TDS on the sale price of the property if capital gain is long term capital gain. In case of short term capital gain, TDS will be 33.99% irrespective of income tax slab of NRI as i mentioned earlier also. Buyer will deposit TDS with Income Tax Department. TDS is applicable even if value of property is less than 50 lakhs. For resident Indian seller TDS of 1% is applicable only if the property value is more than 50 lakhs.
Now anomaly in this rule is that NRI is liable to pay Capital Gain Tax only on the Capital Gain arising out of sale of the property but unfortunately TDS is deducted on the total Sale Value of the property. Therefore in most of the cases there are no GAINS as such from the sale of property and actually NRI incur LOSS from the sale of the property if TDS refund is not claimed. As a result, NRI has to go through the process of claiming TDS refund from Income Tax Department.
(c) Re-Investment of Capital Gains: In many cases, i observed that to save capital gain tax my NRI clients planned to re-invest the capital gain from sale of property to save capital gain tax. Long term Capital Gain can be invested in either property or tax exempt bonds to save long term capital gain tax. In such cases, NRI can apply for Tax Exemption Certificate from Income Tax Department under section 195 of the income tax act, 1961.
All the above mentioned 3 points are inter linked to each other. The biggest confusion arises when all 3 are points are read in isolation or mutually exclusive to each other. In my next post How NRI’s can Lower TDS on Property Sale? we will understand this concept with detailed example of one of my client Mr Ashok Taneja from USA. Now even if TDS is deducted then under following 3 possible scenarios NRI’s can claim TDS refund
TDS Refund by NRI’S
1. If your country of residence has Double Taxation Avoidance Agreements (DTAA) with Indian government i.e. lower rate of TDS is allowed. NRI need to submit a tax residency certification from the country of his residence. it will certify that you are a tax paying resident in that country and that tax on this income is paid in that country, it ensure no tax leakage for either countries.
For example, In US, the tax residency certificate is called Form 6166. You can make application to the Internal Revenue Service (IRS) in Form 8802. In UK you need to get the tax residency certificate from the HM Revenue and Customs.
2. If your total income in India is less than basic exemption limit of 2.5 Lac: In this case, you can apply for TDS waiver with Income Tax officer under whose jurisdiction your case will fall.
3. You can claim TDS refund if can show proof of reinvestment of capital gains in India. You can either buy another house in India or invest in capital gains bonds u/c 54EC. You should submit an affidavit stating that you will invest the capital gain amount in capital gain bonds. For property purchase you can produce allotment letter or payment receipts.
Instead of claiming refund which is more tedious process it is always advisable to apply for NIL Tax Deduction / Tax Exemption / Lower Tax Deduction Certificate. It require some intelligent planning before sale of property and proactive approach. We will discuss the same in next post How NRI’s can Lower TDS on Property Sale?.
Hope you liked the post. Please feel free to share your feedback, comments and inputs.
Copyright © Nitin Bhatia. All Rights Reserved.
Very well written article. Thanks for the detailed info.
Thanks for liking the post. You may share with your friends and family members through social media.
Agree with all the positive comments on your posts but wanted to add an obvious comment; it is completely unfair for the indian government to dictate withholding tax on the principal value (sale price) as opposed to the deemed profit. Is there any movement against this unfair law?
This law is only to ensure tax compliance. A seller can always claim refund of excess TDS / Capital gain tax deducted
Hi Nitin,
Seller in our case is NRI and claiming to be ROR as per his number of days stay in india in last 6 years.
and since he is ROR, he is saying us to deduct 1% tax and not 20% tax
How can I be assured in this case
nitin sir,
please reply,How can I be assured if person carrying US passport is the seller and claiming to be ror and asking us to deduct 1% tax and not 20% tax ,based on his residency days in india in last 6 years
I have already answered this query.
Hi Nitin ,
Thanks for the revert and very useful informative article
could you please refer/provide the mail/id contact for answering above mentioned queries.
Is there any relationship between nationality and resident ship wrt to nri taxation.
A person carrying US Passport(born and brought up in india) and claiming to be resident and asking us to deduct 1% tax and not 20% tax ,based on his residency days in india in last 6 years
he is doing job in india for last 5 years and travel frequently out of india
You can mail at info@nitinbhatia.in for personalized consultation.
Nitin Sir,mailed you at the above mentioned mail id
Please check and advice
Please check your mail. I have replied.
Resident but not ordinary resident ( RNOR) are not covered under section 195 but it is your duty to confirm the same. You may check his passport whether either of following 2 conditions are fulfilled or not
Seller is NRI, in nine out of the ten previous years preceding current year or during the seven previous years preceding current year, been in India for a period of 729 days or less
Thank nitin sir, for the revert,seller in our case is carrying USA Passport
He is claiming to have spent more than 365 days in india in last four years
and this year residing more than 182 days in india
He is sharing his last two years income tax return with resident status
and his pan card
He is saying he should be treated as an resident indian and is not covered under section 195
How I can safeguard myself
Sir please revert as it is very important for us as we have already given the biana
As it is a taxation case and this forum is only for general queries. I cannot comment without going through all the documents. I have already shared rules in this regard in my previous comment.
Dear Nitin,
I have completed a sale agreement with an NRI without knowing this 20% TDS rule. Needless to say lawyer and sub-registrar didnt advise the same. So I have deducted only 1% TDS. The NRI obviously now will not pay me remaining 19% and he is already having LT capital loss on this deal (which is true) and he will be filing his returns this year to register this loss (and may be to recover 1% also). What are my future troubles.
My lawyer says that the seller has given his Indian residential address on agreement and resident PAN and resident savings account for this transaction so I need not worry as I may say I was unaware of his NRI status if IT query comes. Is this correct?
If you were genuinely not aware of his NRI status and he suppressed facts for TDS evasion then i do agree with your lawyer. At the same time, now you know he is NRI you may send a notice to him through lawyer with all facts to safeguard your interest.
well I am an NRI planning to sell my property back home and completely stumped by reading this article. Paying 20% to GoI and hoping to get it back looks like a dream and running behind AO to get NIL/lower TDS certificate also looks like a risky bet especially in Maharashtra where you have to register agreement to sale beforehand by paying full stamp duty.
Dear Nitin,
please tell me if following method is acceptable. I am now planning to transfer the property to my parents through gift deed and parents who are residents will sale it later. I will have to pay gift stamp duty but that’s 2% I can afford rather than risk 20%.
Thumbs up from my end :)
Hello Nitin, your article is really informative. What are the recongnised proofs that I can accept from the seller to indicate that he/she is an NRI? And what are the documents that are required to be submitted to the AO for claiming a certificate of NIL TDS incase of no capital gain?
~
Sayantan
Documents for NRI status are
(a) Copy of Indian Passport
(b) Copy of employment / residence or work / residence permit.
To claim NIL TDS Certificate
– Duly filled and signed Form 13
– Photo copy of PAN Card of seller
– Proof of residential Status – Passport copy with VISA stamping
– Proof of TDS, Advance Tax paid, if any
– In case Income during the previous 3 years was below taxable limit, an affidavit to that effect
– Copy of the Registered Sale deed (at the time of purchase of property)
– Copy of the sale agreement between NRI seller and the resident Indian Buyer
– Capital gain calculation
– Proof for exemption/deductions claimed under the head capital gain
– Bank guarantee for the tax liability arising out of the transaction if it is proposed to issue NIL TDS Certificate
Hello Nitin,
Thanks for the clarifications. I however have one doubt.
Whether the AO will accept an Affidavit of future investment in Bonds and issue lower deduction certificate now? Reference:’You should submit an affidavit stating that you will invest the capital gain amount in capital gain bonds’
I’m currently in process of meeting my client’s AO. Is there any judicial supporting to convince the AO to issue Lower Deduction certificate on the basis of Affidavit?
I’LL BE REALLY GRATEFUL FOR YOUR ADVICE AND IF YOU CAN SHARE YOUR PRACTICAL EXPERIENCE IN THIS REGARD.
CA Niraj Mahajan
Pune 9860092752
I don’t think so. Though it depend on case to case basis.
Hi Nitin,
Its a good and informative article.
But can you please clear on few of the following doubts.
1) From point written in section (b) is still not yet clear that the 20.66% or 33.99% tax is applicable on “Selling price of the property” OR on “Purchase Price – Selling Price of the property” ?
2) In a scenario where an NRI has purchased a property at price of 1 crore but sells that same property in 90 lacks then as i believe its not a capital gain, instead it’s a capital loss so is it mandatory for buyer to deduct any TDS from the payment given to NRI seller ? If yes then on which amount.
Kindly Reply
1. Selling price of the property
2. Yes on Selling price of the property
Hi Nitin,
Thanks for the great article, your blogs have helped a lot in gaining good knowledge.
In given scenario: Say NRI selling price is 80lacs. If reduction certificate is not applied during sale by NRI, means TDS on entire sale around 16lacs is cut.
Now, during tax filing season, if NRI while filing taxes – enters actual capital gain in the gain column- say 8lacs, actual TDS cut is 16lacs, means he will get 8lacs as tax refund correct? (Ignoring other incomes,%ages etc for now).
Mainly does NRI have to provide any new affidavits,documents,deeds,etc while filing taxes at the end of year to get this refund or normal tax filling should be enough to get the refund at the end of year?
This is I mean tax filing in India. When NRI will file taxes in India that time.
If capital gain is 8 lac then you need to calculate capital gain tax which will be 20% i.e. 1.6 lac. You will get refund of 16 lac minus 1.6 lac i.e. 14.4 lac.
I am assuming you have PAN and you can file normal ITR as applicable in your case. You should have TDS certificate at the time of filing of return.
Thanks a lot Nitin for clarification.
Hello Nitin, thank you for sharing your views on TDS. Like many others we want to clarify our doubt.
Our NRI seller has provided us with Long term capital loss certificate. How much TDS should we deduct as a buyer and on which amount?
He is agreeing to provide us with an indemnity declaring that in future if there is any tax liability from Income Tax department, then the seller will be responsible for that. In this scenario shall we go ahead with this without intimating the ITD.
The seller is also ready to provide tax calculation certificate from CA stating no profit on the said property.
Do we have to deduct both TDS on total sale of the property and Capital Gain Tax for an NRI seller?
You have not mentioned who has issued Long term capital loss certificate.
Sir thanks for informative article My doubt is in case a property of NRI is sold by a resident on the basis of power of attorney what will be the TDS implications. Rajiv
TDS will be applicable as the power of attorney holder is only representative of NRI seller.
Hi Nitin,
Your article is very informative. I am an NRI and have a flat in India that I bought in 2010 which I want to sell. Say I bought the flat for 1 crore and the selling price is 2 crores. I am assuming that my long term cap gain is around 22 lakh (22%) and TDS 40 lakh (20% of selling). Is the 18 lakh I pay extra for TDS refundable? If so, do you actually get it back and how long does it generally take? Is there a way to not have to pay TDS by re-investmening in another flat? How much would I have to re-invest and what is the procedure for that.
Thank you
There are multiple permutation and combination in this case. To save capital gain tax, you can buy capital gain tax bonds.
Hi Nitin,
Your post is really appreciated since useful to so many people.
I am NRI selling one house for 65 Lakhs and Long Term Capital Gain is 8 Kakhs. I am investing 30 lakhs jointly with my wife for a residential flat. Should the buyer deduct 20.66% TDS on 65 lakhs?Shall I get full refund of 8Lakhs after filing TDS refund return? Please advise. THANKS.
TDS is applicable. You can claim refund, if you invest in another property to save capital gain tax.
Hi Nitin,
My Brother went to Gulf for work during which he purchased the property for 57 lakhs + registration cost of around 4 Lakhs taking home loan of 41 lakhs for which he has paid around 8 lakhs of interest in the last two years, now he has lost his job and planning to sell his home for 62 lakhs, Its will be helpful if you can let us know if still he is applicable for NRI TDS, as the purchaser advocate has asked us to pay 1% TDS submitting my Brothers PAN CARD.(Note: Purchaser is taking over the loan from the same bank) he is paying us the difference amount. we are selling home at loss).
We are confused kindly help.
Regards,
In this case, TDS will be deducted u/s 195 i.e. 20% plus applicable surcharge and cess.
Thanks Nitin, in this case can we apply for nil tax deduction certificate before go for a sale as we have No capital gain to save TDS
You can apply but you need to prove to IT AO that capital gain from this property transaction is either NIL or you are incurring capital loss.
Thanks for help, Things look clear now, You are doing a great Job God bless!
Hello Nitin,
I am trying to buy land from NRI(US) and how much tds should be done from seller the property is bought by the seller in 1992 and how much tax should he pay in US after paying tax in india ? is there is way to get tax exempted ?
You should deduct 20% TDS plus applicable surcharge and cess. For more details, you may check my other posts on same topic.
But seller says that I am paying tax here in my country and need not pay here in India he is from US is this claim true is there any form I need to take from him as a proof for the tax paid so as to avoid problems from IT dept india in future
Only department of Income Tax can certify the information shared by the seller. As a buyer you cannot certify and skip TDS deduction. You may request seller to provide NIL Tax Deduction certificate issued by I-T department. What will happen if he does not pay tax in US? and as a buyer how will you ensure that he will pay tax in US?. In such cases all the penalties will be imposed on buyer as i shared in my post. As the I-T department has NO control on NRI’s therefore TDS is deducted. A seller can pay tax in US and can claim refund of TDS deducted. In my opinion, TDS should be deducted in your case until unless seller produce NIL deduction certificate issued by department of I-T.
Our NRI seller has Long term capital gain.How much TDS should we deduct as a buyer and on which amount?
He is agreeing to provide us with an indemnity declaring that in future if there is any tax liability from Income Tax department, then the seller will be responsible for that. In this scenario shall we go ahead with this without intimating the ITD, and he is immediatly reinvesting profit in property and partially taking loan on it..
The seller is also ready to provide tax calculation certificate from CA stating minor profit on the said property and reinvesting..
Do we have to deduct both TDS on total sale of the property and Capital Gain Tax for an NRI seller…??.
TDS is 20% plus applicable cess and surcharge. It is deducted on total consideration value of the property. As i mentioned, you should deduct TDS irrespective of any indemnity/certificate from CA/Seller. You may request the seller to produce a NIL or Lower Tax deduction certificate issued by department of income tax else TDS deduction is must.
I had paid the TDS on property on behalf of Purchaser ( Purchaser doesnot have internet banking) from my saving account net banking account. advice me should i charged purchaser the Tax amount. Total Deposit goes for paying TDS is their any harm.
It is not right process. Buyer could have paid at any of the banks that process TDS challans.
hello sir, I had purchased house(Long term in nature) on 10/6/2015 from NRI and deducted TDS @20.60%. As per amendment effective from 1.6.2015 relaxation on obtaining TAN, I had not obtain TAN. I want to know which challan will be used to deposit the TDS deducted?
Can we use form no 26 QB for the same?
Please help
For TDS u/s 195, you need to file challan no 281. In challan no 281, the section of TAN is mandatory. There is no clarity on how to file challan in case of TAN relaxation. You may clarify the same from the helpline of IT department. You cannot use challan 26QB as it is only for TDS u/s 194IA.
Thank you sir. And penalty and interest will be charged if depositing TDS through challan no 281??
Applicable penalty and Interest will be charged. As i mentioned, you may clarify from IT department helpline rather waiting for any clarification.
Thank you sir
IT department helpline me call kiya tha , they said they got no such updation regarding this amendment and adviced to deposite TDS through challan no 281
As i also mentioned there is no clarity, therefore, you may file challan 281 as suggested by IT department.
Hello Sir ,
I wanted to know that if the seller and the buyer both are NRI’s with US and UK respectively what would be the tax implications, and also can you give me some references for the same
It is complex case and the taxation depend on multiple factors. I suggest you to consult a CA in this regard.
Hello Sir,
I’m NRI selling my flat for 88 Lakhs with 73 Lakhs as Sale value and remaining 15 Lakhs under DOTOR. We already spoke to our CA and as per the calculation, we don’t have to pay any Long term gain for 73 Lakhs and also on 15 Lakhs through DOTOR. How we can show this info during the registration to avoid 20% long term gain tax as TDS? Do we have to produce the no capital gain calculation to IT dept. or any other options we are supposed to follow to avoid any penalty to both buyer and the seller.
I appreciate your prompt information on this at the earliest.
With best Regards,
Rajesh Narayan
Amount received through DOTOR will be income from other sources provided you can produce bills of same amount i.e. difference between amount spent on furnishing is same as amount received for furnishing. To avoid capital gain you need to obtain NIL Tax deduction certificate from AO.
Thanks Nitin for your quick reply!
You mean to say, I have to pay capital gain on only Registration price of 73 Lakhs and not on Dotor price right? When I have to show the DOTOR expenses? it would be after registering the flat or before?
Also i read the article that NIL tax deduction certificate is not being given since 2011. Do you have any infromation on this?
Capital Gain will be applicable on Registration Price i.e. 73 lac but DOTOR amount will be taxable depending on the gain i.e. receivable minus expense. DOTOR expenses will be for your calculation of income tax. You need not declare during transaction.
NIL Tax deduction certificate is issued only when AO is satisfied that either your capital gain is NIL or you are incurring capital loss on the property. It is very rare scenario.
Thanks for the update Nitin!
Hi Nitin,
Your posts are helpful. I have a few doubts which i would like to clarify.
Facts: Planning to buy a flat for less than INR 50 Lakhs from the Power of Attorney holder. The Power of Attorney holder is the father in law of the owner of the property. The owner is settled in Australia. I have spoken to the father in law and have been provided a copy of the sale deed and a copy of the power of attorney which appears to have come through the Consulate of Melbourne, Australia. Given these facts, I have the following questions / clarifications:
1. TDS u/s.195 @ 20.66% would need to be done by the buyer irrespective of whether the seller / power of attorney holder plans to reinvest the money within the permitted options u/s.54? Yes / No.
2. The NIL exemption / lower deduction certificate to say that since there is no tax liable, hence the buyer need not apply TDS would be only in case there is no long term capital gain arising for the seller? The seller (current owner in Australia) had purchased this flat for less than INR 10 Lakhs in 2005? For calculation of Capital gain i would presume that an indexation would also need to be done. There could still be a tax liability for the seller. While, this is not of concern to me as a buyer, the TDS @20.66% would need to be done in case the power of attorney holder is not able to give a certificate from the IT dept. Is my understanding right?
3. The sale proceeds should be to the bank account of the seller ( who is in Australia) or would it be fine to pay to the bank account of the power of attorney holder? The power of attorney holder in this case mentions that since the payment is made to him rather than to the seller and hence the money remains in India, there is no instance of TDS. Would this be an acceptable position? In case the payment needs to be made only to the seller, then should it be to NRO or NRE account, i,e. repatriable or non-repatriable?
4. What all documents should I ask from a legal perspective?
5. While i am aware that obtaining an Encumbrance certificate would help validate the legal status of the flat, what is the process to be followed to check if the power of attorney is valid and that it has not already been revoked or utilised already? Is there a time limit for the power of attorney? The power of attorney is silent. It is a one year old document.
6. In case the sale deed is executed with the power of attorney holder, does the sale deed also need to be routed through the embassey / consulate such that the original owner also needs to sign these?
7. Please let me know any other legal precautions to take so that as a buyer we are safe in these kind of transactions.
Thanks
Rajesh
1. Yes. It will be 20.60% as consideration value is less than 1 Cr
2. Yes
3. All payments will be to NRE account of the seller. You are not bothered whether he repatriate or not. You should transfer in NRE account.
4. It depend on case to case basis. Pls check posts on NRI seller and real estate
5. Please check my following post on POA by NRI
https://www.nitinbhatia.in/real-estate/power-of-attorney-by-nri/
6. No
7. It is subjective
8. It is declared by seller only. You may check IT return and include the status in sale deed.
Hi Nitin,
Further to your comments on this site, wanted some clarity on the TDS to be deducted in case the seller is able to provide a certificate. Placed below are the excrepts of proposed manner of executing the transaction by the buyer. request your inputs on whether this is acceptable:
” I called my CA today. He categorically said that he will not be able to provide a capital gain statement with out a final sale deed in place.
Here is what I propose:
1. Before registration, 1% of the sale value will be paid as tax via Form 26QB
(paid by buyer, deducted from sale price)
2. We complete registration.
3. With the copy of final sale deed, CA will calculate the capital gain using
the prevalent indexation value (which will change after March 31st).
4. Based on the calculation, I make the tax payment and provide the receipt for
your records (I am expecting it to be around XX lacs).
5. CA will issue Form 15CB
6. I have to complete the above steps in order to initiate the repatriation
from my bank (and there are no shortcuts).
7. When I file my taxes in 2017, either I get a refund or will pay, if I
am liable for additional tax.
20.6% flat TDS for NRI transaction is open for interpretation.”
In my opinion, it is not right approach. Form 26QB is only for resident Indian. In case of NRI, TDS is deducted u/s 195 as i explained in my posts.
Hey Nitin,
Excellent and well written (for layman)… My bad luck that i only found this article now. My property was registered yesterday and we only found out today from someone that buyer should have deducted 20% (about Rs.25lacs). The Capital gain tax (long term) will be about Rs.3.7lacs. I guess, i will have to educate the buyer on this and somehow make a cheque myself now as his bank has deposited the money in my non resident account in India. Can the buyer still do this? Does he need a TAN?
TDS is buyer’s responsibility you need not worry. You can pay capital gain tax or invest capital gain as the case may be. TAN is required for TDS u/s 195.
Many Thanks. I wanted to book consultation with you and sent a query. I hope you got it. As soon as confurm i will get someone to deposit cash in your account.
Thanks ..
Vikram
In the case of my client sale price is 95 lakhs and stamp duty rate is 1.2 cr on what amount tax to be deducted 95 lakhs or 1.2cr
95 Lacs
Dear Sir/Madam,
We have a query regarding capital gain tax on sale of a residential flat.
We booked a flat in Dombivali on 6th March’2009and our contribution of 20% was paid to developer in next 45 days.
Flat was registered in our name on 4th September’10 after paying registration charges & stamp duty at Registrar’s office.
Balance payment was made by way of construction linked instalments from March’11 to March’14. We received possession of our flat on 9th December 2014.
If we sell our flat now then in that case there will be 2 scenarios:
1. if date of registration is considered then it would be LTCG
2. if date of possession is considered then it would STCG
Kindly clarify the applicable gain (LTCG or STCG??) in our case based on details mentioned above.
3. Also, please guide us on exemptions available in case of LTCG.
Thanks & best regards,
Sumira
Date of acquisition is 6th Mar, 2009. It will be LTCG. You can re-invest the capital gain to purchase new property or buy capital gain bond of REC/NHAI (max limit 50 lacs) to save capital gain tax.
Thank you Sir for your prompt revert. Much appreciated. Sorry to bother you with just one last query. I am an NRI selling property. How easy is it to get a NIL TDS exemption certificate from the IT authorities ? I have already purchased a new property 10 months back and the LTCG from this sale will be invested in the new property. In the event of we not getting the exemption certificate, is it relatively simple to claim refund for TDS? We are concerned that 20.66% TDS shouldn’t get locked up with the government.
If your capital gain from property or after reinvestment in new property is NIL or if there is a capital loss then you can easily get NIL deduction certificate. You can claim refund at the timing of filing this years return in July 2016. If the AO is convinced with your case expect refund within 3 months else it is subjective and may take year/s.
Hi Nitin,
I am planning to buy 2 bhk flat in Pune from NRI for cost of Rs 63 lakhs. NRI has Indian PAN card(Mumbai address) currently lives in Dubai. He purchased this flat from his NRE account as investment in year 2008. Address mentioned in property documents agreement between seller and builder is his Dubai address.
I will be paying 33 from my own saving and 30 lakhs from home loan. Amount for this transaction will be deposited in seller State Bank of India Mumbai NRO account.
Just wanted to clarify TDS deduction process for NRI after changes in place due to Finance bill 2015:
1. I will be deducting TDS @ 20.66% for this property transaction.
2. TAN (Tax Deduction Account No): Before deduction of TDS under section 195 I(buyer) will obtain TAN under section 203A of the Income Tax Act, 1961 by filing Form 49B.
3. Besides TAN I need to have my buyer PAN and seller PAN to deduct TDS under section 195.
4. TDS deducted by me(buyer) should be deposited through Form No / Challan 281 for TDS Payment on or before 7th day of next month in which the TDS is deducted.
5. After depositing TDS, the next step for me(buyer) is to electronically file TDS return by submitting form 27Q.
6. After filing TDS return, I(buyer) can issue TDS certificate ( Form 16A ) to Seller.
a. Are above mentioned steps correct to deduct TDS?
b. As a buyer do I need to fill form 15ca and 15cb before making payments to NRI for this property transaction?
c. If I need to fill form 15CA and 15cb before making payments then do I need fill these form’s two times first when I make payment from my own contribution and second when home loan cheque is disbursed?
d. Is there any other form or tax i need to pay or produce for this property transaction?
e. What proof’s shall i keep with me for this transaction when i pay my income tax for financial year 2015?
A. Very well documented. Process seems fine
B. Form 15CB is issued by CA/accountant. You can electronically upload the form 15CA. Form 15CA is filled based on information provided in form 15CB. These forms may or may not be required in all the cases.
C. No. Only one form is filed.
D. I don’t think so but as i have not checked all the details, you may confirm from your lawyer/CA
E. You need not provide any proof while filing ITR. Please retain copy of the all documents for your reference in case of any scrutiny by IT department.
Thanks a lot for reply Nitin. Further I wanted to clarify on point B and C:
B.
Payments for purchase of this NRI property will be transferred in NRO account.Will forms 15CB and 15CA be mandatory be required before transfer of payments to NRO account? Please let me know if you need more information on this transaction to confirm on form 15CB/15CA requirement?
C.
You mentioned only one form is required but both forms 15CB and 15 CB has field – Proposed Date of Remittance.
There will be two dates of remittance in my case. One date will be when I will make payments from my contributions and second date will be when bank will disburse cheque in favour of seller. So I need to fill forms 15CB/15CA before both remittances?
As i have not checked all the details therefore cannot say with 100% conviction but based on info shared
B: Prima facie Yes, but i have a doubt as the investment was done from NRE account then seller should accept payment in NRE account only.
C: If you are declaring two remittances then you can file two form 15CA and need two form 15CB.
Hi Nitin,
I have got my CA to prepare 15 CB forms but my bank says they don’t require form 15 CB form.
1) Whom should I submit form 15 CB if bank dont require it ?
2)Should I only keep form 15CB with me and submit form 15 CA online based on 15 CB?
3) Do i need to submit form 15CB to income tax?
1. You can keep it with you for your reference. In case of any clarification from IT, you may need it. As the remittance is not processed by home loan provider therefore they don’t need.
2. Right
3. On demand only. 15CA is submitted to Income Tax department & 15CA is filled based on 15CB therefore not exactly required by IT.
Thanks Nitin,
I have filled up form 15CA online and form is submitted with acknowledgement number generated. Do I need to take print, sign and submit this form manually to income tax department?
Do i need to submit in hand to AO or there is any specific department in income tax which collect these forms?
No. The process is complete. As i mentioned that retain ack of 15CA and original 15CB for your reference. Now you have to file TDS return :).
Hi,
I’m planning to buy property in Gugaon from NRI working in Hong Kong with Australian citizenship. He has India pancard he booked property in 2006 and got possession in 2015. I will pay 40% money from my pocket rest Through loan.
1. Wanted to know how much tds that I should deduct.
2. The seller has asked me to apply for TAN number so that he can apply for lower tax or nill tax as he is of the opinion that he is selling property at loss.
3.Is it possible to get certificate from IT deptt on the same?
4. Will the certificate suffice my liability of deducting no or less tds as mentioned in certificate
5. What documents should I keep to avoid any liability of tax when filing return next year.
Suhail
1. It depends on value of the property
2. He is right. You should apply for TAN first.
3. TAN and lower tax deduction certificate has NO correlation. TAN is required to deduct TDS if need arises. Therefore, in case he get lower tax deduction certificate or it is denied then you should be ready with TAN for property transaction.
4. Yes. You should get it verified from IT department i.e. it is original. In Delhi and NCR i came across cases of fake certificates by agents.
5. It is subjective and vary from case to case basis. Please check my posts on NRI property.
Hi Nitin –
This is excellent article. I have few questions with respect to 1% TDS that a buyer needs to submit to government if the property purchased is more than 50 Lakhs rupees.
I have purchased an under construction flat in Gurgaon with total cost of 53 Lakhs.
I have purchased with my father and have made most of the payments before June 2013. I was a resident Indian at that time.
Now, I am a NRI but my father is still a resident Indian. We still have about 12 Lakhs worth of installments pending.
Can you please let me know the following:
1. As a NRI, do I need to pay 1% TDS as when I get a demand letter from the builder on the remaining amount, I.e., 12 Lakhs.
2. Also, do me and my dad both need to pay 1% separately
Thanks,
Rahul
1. For NRI TDS is 20.60%. The TDS of 1% is applicable only for resident Indian. TDS will be applicable on installment of 12 lakhs.
2. TDS is deducted in proportion of ownership. If you and your father has equal share in property then for the installment of 12 lakhs, TDS on 6 lakhs will be deducted at 1% (for your fathers share) and TDS on balance 6 lakhs i.e. your share will be 20.60%.
Hi Nitin –
Thanks for your prompt response.
Since it’s an under construction flat owned jointly by my dad and me and we have not taken any loan on this apartment, I think it will be safe to
consider that it’s a 50-50% ownership.
So for my dad who is a resident Indian, it seems to be straight forward that we need to pay 1% TDS on 6 lakhs.
I am a bit confused about the TDS on my part of the ownership.
When I purchased this flat in 2011, I was resident Indian, and I paid all installments as resident Indian. I became an NRI a year ago, and this is the first demand letter from the builder since then.
Now, if I deduct 20.6% of the 6 lakhs and pay it to the government then does it mean I need to pay only 79.4% of my 6 lakhs to the builder. What I am failing to understand why would a builder agree to take a reduction in his/her payment from 99% when I was resident Indian to 79.6% now since I am an NRI.
This seems to be the complex part that I am failing to understand, given my limited knowledge of these tax rules.
Please advise.
Rahul
Hi Nitin –
Thanks for your prompt response.
I thought I read your response earlier that I as an NRI owe 20.6% TDS, but it seems that your response was updated y’day.
Just to give you some background, this is an under construction property from a Builder in Gurgaon, which I have purchased about 5 years back. At that time, both I and my dad were resident Indian. Since then I have moved to the U.S, I am an NRI with Indian passport but my dad is still a resident Indian.
Can you please clarify that irrespective of NRI (that is me with Indian passport) or resident Indian (my dad), we both need to submit 1% of 6 lakhs each, as we both are 50-50% partner in the apartment.
Please confirm.
Thanks,
Rahul
Your understanding is correct.
Hi Nitin,
My husband is staying in Thailand and I am working as a Teacher in Panvel,India.
We booked a flat whose agreement value is 58 lakh which is under construction in navi mumbai.
The flat is booked in the name of my husband and me.
How should we pay TDS for the property?
Please guide me through this.
Regards,
Aparna
You have not mentioned whether your husband is NRI or Resident Indian.
Hi,
I Resident Indian intend to buy flat in Pune for cost of Rs 6400000 from NRI seller who lives in UAE. Seller will be providing me Nil Tax Deduction Certificate hence I won’t be deducting any TDS on this property transaction. I will be paying 50% of amount from Home Loan and 50% from my personal contribution. Entire Amount from bank and personal contribution will be transferred in sellers NRO account. Wanted to understand process to buy flat from NRI when NRI seller provides Nil Tax Deduction Certificate.
1) Do I need to obtain form 15CB and 15CA for this property transaction as money will be transaferred in seller’s NRO account?
2) Once seller provides me with Nil Tax Deduction Certificate do I need to deduct any other tax or fill any other form of income tax ?
3) Do I need to quote Nil TDS Deduction Certificate number or details in Sale Deed or Agreement to Sale or any other property document?
4) Will the registrar ask for Nil Tax Deduction Certificate at the time of registering property and paying stamp duty and registration?
5) Will the mortgagee bank ask for Nil Tax Deduction Certificate at the time of disbursal of home loan component amount?
6) As a buyer do i need to give any intimation to income tax for this property transaction?
7) Do I just need to pay stamp duty and registration and tranfer amount to seller for this transaction?
8) Do I need any proofs of this transacton while filing income tax returns?
9) Where exactly Nil Tax Deduction Certificate will be used during this entire property transaction?
Regards,
Nadeem
1. If the remittance is chargeable to tax in India then form 15CA and 15CB is required
2. You have to file NIL TDS return
3. You can mention. It is advisable to mention complete details.
4. He may ask.
5. Ideally they should ask but some HFC’s or banks don’t demand. It is advisable to submit proactively even if it is not demanded.
6. IT department will come to know automatically :). On serious note, Yes through ITR (Income Tax Return) you can declare.
7. No, you will pay directly to sub registrar through DD or Banker’s Cheque
8. Property documents and TDS Return are sufficient proof.
9. A seller will submit original copy to you and you will file NIL TDS return. In the return you need details of Nil Tax Deduction Certificate.
Each NRI property case is different in nature. I have answered queries based on info shared. As i have not checked complete details therefore you may hire a CA to cross verify.
Hi Nitin,
I am impressed with your depth of knowledge and promptness in responding the questions.
I have few questions as well:
We ( my brother and myself) inherited property from my father. The property qualifies as long term investment. I live in US and my brother lives in India.
We are selling the house and based on overall calculations, the capital gains for each of us is about 1.5 crore INR.
I am getting a TRC from USA and completing the other paper documentation like self declarations, Form 10 etc.
I am not planning on buying another property.
I will buy Capital Gains Bonds like NHAI and REC for 50lacs.
Please advise what options are there to further reduce the tax burden
Regards,
Prakash
Unfortunately there are only 2 ways to save long term capital gain either through investment in property or invest in capital gains bond.
Without going through all the details i cannot answer these queries. You may consult a local CA.
Dear Nitin,
I am planning to buy a Showroom from an NRI for 2.5 crore. The long term capital gain is around 2 crore for the seller. The TDS comes out to be around Rs. 55 lakhs (22% of Total Sale value)
The seller plans to invest 50 lakhs in NHAI bonds before the final sale deed.
My questions are.
1. If the NRI invests in these bonds by taking the token amount from me and shows me the proof of investment before the final sale deed, do we still need the TDS exemption certificate from the IT department?
2. The 50 lakh limit on NHAI BONDS is on the long term capital gain (ie Rs. 2 Crore) or on the capital gain tax (ie 55 lakh)
3. If 50 lakh is invested in these bonds, should I deduct TDS on the balance amount ie Rs. 2 CRORE) or on the balance TDS (ie. Rs. 5 lakhs)
Thanks.
Vineet Sharma
1. Yes
2.Capital Gain
3. TDS will be deducted on 2.5 Cr until unless tax exemption certificate is available
Dear Sir,
For TDS deduction for NRI seller, can I deposit tax via Form 26QB and issue Form 16B subsequently? Or I have to compulsory apply for TAN?
You have to apply for TAN and deposit TDS u/s 195.
Thanks a lot Sir
I have already answered
Dear sir, in my case amount to be paid is above 1 crore, do I need to deduct surcharge also? Can you confirm rate of deduction is 20.66% or 23.072% (including surcharge).
Thanks a lot Sir.
23.072% is on listed schemes other than equity. For property it is 20.66%.
Thanks a lot sir for confirmation.
Hi,
I am a NRI n want to purchase a flat that costs 67 lakh. Can you please guide what is tds rate and procedure to pay it.
TDS will be 1%. Please check following post for more details
https://www.nitinbhatia.in/real-estate/how-to-deduct-tds-on-property-sale-us-194ia/
If property owned jointly by one Resident Indian & other NRI then how much TDS to be deducted by purchaser? And what will be the share if seller wants only 5% towards NRI owner & 95% to RI a/c, then what is the TDS implication and whether it is allowed as per Income Tax rules for splitting amount in such manner.
It depends on proportion of ownership. It cannot be decided by the seller. If it is not mentioned in agreement of seller then it is assumed to be equal. Therefore on 50% amount, you will deduct 20.60% and on balance 1%.
agreement of seller means?
And if as per DTAA no SC is applicable I suppose
Sale deed of current seller means sale deed signed by him when he bought property. A buyer is not concerned about DTAA and other provisions. TDS is applicable until unless seller produce nil tax deduction or tax exemption certificate from Income tax department.
Sir,
If seller have applied for low withholding certificate, then shall needs to mention advance amount in agreement to sell or only total consideration is enough, because my consultant said that only total consideration needs to be mentioned rather than to mention advance amount in agreement to sell. Please clarify the amount shall i mention or not.
You can mention both values i.e. total consideration and advance paid. If you will not mention advance then it will be not an agreement but just an MOU.
Thanks for the reply, i am mentioning Total Consideration will be paid at the time of registration in agreement to sell and afterwards will make MOU for the amount buyer paying to Seller. is it fine.
Sorry i could not understand. As i mentioned your agreement will be MOU only that is legally non binding. In this case, i will not suggest you to pay any advance or token money as it will not be documented.
Thank you sir.
(1)IS NRI PURCHASER LIABLE TO DEDUCT 1% TDS ON PURCHASE OF PROPERTY FROM RESIDENT INDIAN BUILDER?
(2 ) Is TDS DEDUCTION MANDATORY FROM THE EACH AND EVERY INSTALMENTS RAISED BY THE BUILDER FROM TIME TO TIME FOR A BUILDING UNDER CONSTRUCTION OR total TDS BE DEDUCTED WHEN PROPERTY IS READY FOR HANDOVER/POSSESSION
1. Yes
2. TDS is due at the time of each payment/installment.
Dear Sir,
I am in process of buying a property where the person is NRI . The total sales consideration is above 1 Cr . CA of the Seller has mentioned a circular dated 26th March,15 – Clarification regarding explanation 5 to clause (i) of sub section (1) of section 9 of Income tax act 1961 and has said tds @20% is applicable for the long term capital tax gain part only and not on total sale value.
Please guide me what should i do.
It is not right interpretation. It states tax is applicable only on the income or gains in India but there is no mention of TDS. This circular only clarify doubts created by certain Judicial decisions on the right of country to tax the income generated on its land. As a buyer you are not the right authority to certify the long term capital gain of the seller. Secondly, there is no amendment to sec 195. Therefore in my opinion, TDS is applicable on total consideration value. You may check the circular at following link
http://www.incometaxindia.gov.in/communications/circular/circular_4_2015.pdf
Dear Sir,
I am planning to buy an under construction property from a NRI. Property was allotted on Mar, 2012. Allotment letter mentions building name but no flat number. Sale agreement was done on Dec, 2013. Need help to understand if it is LTCG or STCG for seller if it is sold now. Doubt is what is considered as ‘date of acquisition’ here – allotment letter date (LTCG in that case) or sale agreement date (STCG in that case).
Is it subject to IT officer judgement? or there is IT clause which confirms it.
Many thanks,
Dev
Date of allotment is date of acquisition for under construction property.
Hi Nitin,
I live in the US. I recently sold property in India in the year 2015. The property was held in 2011 but registration of the property was done in year 2013. After selling the property I also reinvested my capital gains into another property. I have a few clarifying questions. Will appreciate your help here.
1. My CA talked to income tax officer for NIL TDS certificate. Income tax officer is saying that my case falls into short term capital gain because registration was done in 2013. Is this true? Is this how short term capital gain is calculated?
2. Even if my case is short term capital gains, can I not apply for NIL TDS certificate given that I already invested the capital gain amount into another property?
Thanks,
Prakash
1. There is ambiguity in this regard. IT office is considering date of registration as date of acquisition. In this case, it is correct. You may contest that date of allotment of under construction property should be considered as date of acquisition.
2. No. In this case, reinvestment in another property will not help in saving the capital gain. You have to pay the tax at marginal tax rate.
Thanks a lot Nitin for prompt reply. I agree with tax on capital gain. What about TDS on overall value of the property? For example – if property sell value is 1 cr and capital gain is 10 lacs. Tax on capital gain is around 2 lacs. TDS is around 33 lacs. Do I need to pay 33 lacs or 2 lacs? What is the way to avoid paying 33 lacs to income tax department?
TDS on 1 Cr property will be 20.66%. You may obtain lower tax deduction or NIL tax deduction certificate from IT department.
I VS Kumar wish to clarify on tax fronts related to sale of my apartmet
I am a NRI
Flat Purchase Amount Rs 4257304.00
Date Of Registration Dec 2007
Sale value Rs 64,00,000.00
Proposed date of Sale March 2015
Let me know
1. How much buyer will deduct from me as TDS
2. How to reduce the TDS
3. How much will be the tax, if I have to pay
Your reply will be highly appriciated
Regards
VS Kumar
kumarvs88@gmail.com
1. 20.60% of 64L
2. You may obtain lower tax deduction certificate from IT department but it is subjective.
3. 20% of capital gain
Sir…is TAN still compulsory after amendment of section 203 A in 2015 for buying property from nri which says no TAN is required….or we can use form 26qb…has notification with regard to this been issued…
2. What is tds to be deducted from registry amount 20.6 % or 20.66 %….
Regards
Dr navreet Natt
1. It is not true in all the cases. If you are not liable for audit u/s 44AB of the IT Act and complete transaction is one time i.e. single transaction with an NRI then TAN is not required. However, TAN is required for the filing of challan u/s 195. There is no provision to file challan without TAN. You cannot used 26QB. It is only for resident Indian seller.
2. It depends on the transaction value.
Sir..My property value is 90 lakhs…tds deducted shd be 20.6 or 20.66%….
TDS should be 20.60%
Hi Nitin,
I panned to buy home ( Resale Flat) into Thane. My prospective seller is NRI & have NRO account with Indian Bank.
Now she wish to take amount credit of my own contribution and loan amount into his NRO account into Indian Bank.
We agree into MOU that myself will pay 1% TDS ( Rs.80,000) to Income tax department and furnish challan.
Note:- Flat agreement cost would be 80 lac
I have below questions:-
1. Whether he is eligible/liable to pay 20% TDS if he wish to take credit into his NRO account ?
2. If he takes credit into his NRO account and didn’t pay TDS (If 20% TDS applicable) who is responsible for this ? buyer or seller ?
3. Whether its buyer or seller liability to pay TDS to income tax department ?
4. If it was discovered by income tax department afterwards that he should have paid 20% TDS instead of 1% , who will be held responsible for this transaction ? buyer or seller ?
5. Whether buyer comes under Income Tax action in case this discovers seller has taken payment into NRO and liable to pay 20% TDS.
I am bit worried since he is NRI and wish to take credit into NRO account. I should not land into income tax related issues after buying this property.
Your guidance in this regards is highly appreciated.
1. TDS of 20.60% is applicable. The payment should be made only in NRO account.
2. TDS is buyer’s responsibility. You have to deduct the same.
3. Buyer’s responsibility
4. Buyer
5. Yes
Thanks Nitin, This helped me to take decision on new property purchase.
She also has Indian bank normal savings account and now ready to take credit into same. Now is there any issue if only 1%TDS is paid ?
The TDS is responsibility of a buyer. The 1% TDS is applicable in case of resident Indian seller therefore there is NO Question of 1% TDS. If you go ahead then you might have to bear all the penalties in future.
My friend is selling his flat in Mumbai which he bought 5 yrs back.He is an NRI can u advice what is the long term capital gain tax applicable if the value is more than 1 crore.
To calculate long term capital gain tax, please check following link
https://www.nitinbhatia.in/personal-finance/capital-gain/
Hello Nitin
I am a NRI – I bought a house in Bangalore and it was registered in my name in Dec 2008, which I sold in Dec 2011, holding it for greater than 3 yrs .
I worked with a Chartered Accountant at that time, however he told me nothing about the TDS by the buyer. Nor did the agent who the buyer was using – so nothing was withheld. On the CA’s advice, I did open up a CGSA in Dec 2011 and deposited the gains there.
The three years completed in Dec 2014 and while I should have filed my taxes in 2015 with this data and paid the taxes there – due to unavoidable circumstances I could not. I did file my regular taxes based on the interest income in India.
What do I do now? Do I revise/correct the Tax that I filed in 2015 – to include th taxes from the sale of the house? How do I do that? Plus how do I get the AO to approve my Form G to be able to withdraw from the CGSA.
Please tell me what I need to do now and by when to avoid any further stress on this issue.
BTW – are your offices in Delhi
If your return is still not assessed then you can revise your IT return. You can pay your taxes and produce the same to AO to approve form G.
Hello sir,
One of my relative staying in USA for last 25 years and hold PIO card and he has also PAN card here in India. He sold a residential flat in Delhi for Rs.1.80 cr. which he was purchased 7 years back for Rs.65 Lacs. The property is in their joint name husband & wife. Wife dont have PAN card in India but have the PIO card.Their Buyer did not deducted any TDS on sale value.
Now, my question is
1. How they will pay Tax @22.66% and how they will fill up Form 15CA as there is no TDS. or what would be the appropriate process to comply if they want to pay LTCG here in India before leaving country?
2. I have calculated LTCG after Indexed cost of acquisition & Improvement which Is. Rs.48 Lacs, If they want to Invest in NHAI /REC Bond , what would be the process for compliance and is there any requirement to file 15CA and obtaining certificate in form 15CB form a CA to transfer money from NRO to NRE A/C?
3. What would be the tax compliance process for her wife who is joint holder in this property and having no PAN card but PIO number?
4. Could you pls. help me in DTAA issue as they are living in california, ….what would be most beneficial tax planning for them?
I shall be grateful if you kindly reply my query Sir………………..
1. There is no other process. You may refund the TDS to buyer and request him to follow the process
2. You can simply invest in capital gains bond. Still the process should be followed as i shared in point 1
3. TDS is deducted @ 20% in case PAN is not provided. Preferably, she should apply for PAN and follow the process
4. I need to check all the details to answer.
But SIr, My relative calculated the LTCG after deducting Indexed cost of acquisition and improvement and paid the tax by himself….what would be the consequences?
If the tax is paid then you need not worry.
Hi Nitin, When you mentioned property from NRI, does it mean NRI in tax terms or citizenship ? My bother hold US passport( Indian origin), he came back to India and he is residing in India for last 10 years ( paying taxes), currently he is selling his property in India ( House for 1.1 Cr), this case is he considered as NRI or resident ? What should be TDS rate ? Thanks in advance
Your brother is US Citizen i.e. foreign national. As he is residing in India therefore prima facie he is resident Indian. A US Citizen can be resident Indian.
Hello Nitin, What is the TDS %age applicable if the NRI seller is having PAN Card and saving account in Indian Bank.
TDS is decided by residence status not by PAN and Savings account. Any NRI can have PAN and Indian Savings account but still TDS will be 20.60%.
In your case, TDS will be 20.60% as i shared in my post.
Hi Nitin, Thanks for a very clear blog on TDS payment. I am buying land from a NRI buyer. I have a doubt, in case if I pay TDS (using form 281) and my land deal is cancelled because of some reason, can I claim the TDS amount paid by me to incometax ? if yes, what is the procedure?
TDS is deducted from the seller’s contribution therefore seller should be worried not a buyer.
im indian resident purchased a flat in 30L & sold after 3 yrs in 42L. As per your LTCG formula gain comes to 594366. So to get exemption from LTCG i have to invest only 594366 to Bonds like NHAI and REC?
That’s correct.
Hi Nitin,
I bought a property for Rs1.5 crs in Jun-14. I am an NRI and was not aware of the TDS of 1% on property, so I paid the full amount to the builder. Now, I have received a notice regarding the TDS non-payment. Please advice the possible remedies under this situation.
You can request builder to refund the 1% TDS amount and then pay the same along with applicable penalties.
MY NRI FRND WANTS TO SELL HIS PROPERTY IN INDIA AND HIS BUYING PRICE IS 47 LAKH AND SELLING PRICE IS 49 LAKH , IS THERE ANY TDS LIABILITY ON BUYER OR TO THE SELLER… PLS HELP ME..
As i shared in my post that in case of NRI Seller, buyer will deduct TDS of 20.60% in case of LTCG and 33.99% in case of STCG.