Tds on property sale for nris

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 24 September 2016

1. Actually, purchaser is liable to deduct TDS @ 1% from residents (sellers) and @ 20% (+3% cess) from NRIs/foreign nationals etc., while purchaing any immovable property, and deposit the said tax such deducted to government Treasury (TRACES in short), on behalf of seller. The purchaser has to issue TDS certificate to the seller, downloaded from the site.

2. The deducted amount is from the agreed sale value of the property and the seller has right over it to claim it back from the department, by way of filling IT return.

3. As you are not aware of the procedure, the purchaser has asked you to complete the formalities from your end. Your CA should have inform you about it.

4. As buyer has to deduct and deposit the TDS, and when he is having TAN, he has given that TAN to you, so that you can deposit on his behalf.

3. The balance amount of 50 lakhs (less 19.57 L TDS; add the same as reimbursment, if any), you can receive only when the formality is completed.

4. Your CA can apply and get no deduction certificate from your ITO, if you have any plan to invest any amount under section 54, 54EC etc. Based on that certificate the TDS amount can be reduced or become NIL.

Good luck

Sammy (IT Consultant) (27 Points)
Replied 24 September 2016

Thank you so much sir for detailed reply. We can't do anything now as ship has already sailed. The sale deed for property is already done. He said he couldn't pay the TDS as he didn't have the money.

A very short question - If I use his TAN number while paying the TDS on his behalf, can I claim refund on TDS from the income tax department.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 24 September 2016

As for your satisfaction, I can say that, after the payment, his CA will file TDS return next month (October '16), and after about a fortnight, he will be able to download form 16B, in which your names as owner/s of the property along with your PAN Nos. will appear. For getting refund back, you will have to file ITR, with this capital gains, and all other incomes. Refund shall be issued only after deducting all your tax liability.

Sammy (IT Consultant) (27 Points)
Replied 24 September 2016

Thanks a lot Sir.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 24 September 2016

My pleasure

Pratosh (Project Manager) (85 Points)
Replied 24 September 2016

please check my private msg.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 25 September 2016

For your information, just indexation over the property sold may not be able to save your total tax liability. And the Refund amount which you may get back will be after deduction of your total tax liability. So, compute the capital gain first, and check the various options available to save tax, before its too late.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 25 September 2016

@ Mr. Pratosh,

Sorry, no PM received.

Pratosh (Project Manager) (85 Points)
Replied 25 September 2016

Correct Mr. Rambhia.

I sent PM for the same purpose to Mr. Sammy. Just to see that anyone's personal wealth / deal details are not public. I asked him the purchase cost and year of purchase to work out the indexation and save some extra as I review in his communucation here that he is noot indexing the cost so will land up paying TDS on full amount that he is receiving and will not be able to recover the monies that easily as it seems.

Thanks for inquiring about PM Mr. Rambhia

Sammy (IT Consultant) (27 Points)
Replied 25 September 2016

Thanks for help.
I bought in 2010 and since then there is not much increase in the property prices but inflation has been very high. So the indexation cost worked out from different sources - online and couple of C.A.s, is coming to approx 88 lakhs and I am supposed to pay tax on only 7 lakhs profit. That also I am planning to either invest in infra bonds or show the expenses for furniture and some money paid to builder for altering the apartment. I do have receipts for later. For furniture I will find out.

One of the options would have been to go to Income Tax office and bring some certificate of lower taxation but it needs some efforts especially when I am living abroad.

I am only concerned about proper process and section at the moment and whether using buyer's TAN will give him right to claim refund. Thanks