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Tds on purchase of property from nri

pillai (retired) (37 Points)

23 October 2016

I am in advanced stage of discussion with NRI for purchase of property in Pune of value 72 lacs. please clarify if my understanding stated below is correct and if not please inform the correction 1)tds rate is 20% +cess 3% ? 2)challan 281 to be used to deposit with notified bank.? 3)form 27Q to be filled once in quarter ? 4)where should this form 27 Q to be presented? 5)how to get the form 16 for seller? is it from traces after logging in with pan of seller? pl reply at the earliest thanks pillai

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14 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 23 October 2016

1. Correct

2. yes or even online, but before next 7th date.. TAN of purchaser required

3. correct, called TDS return filling

4. Online filling on TRACES

5. After return filling, the deductee can download form 16A by next 15 days. After login TRACES with PURCHASER'S TAN no.

Good luck

pillai (retired) (37 Points)
Replied 25 October 2016

Thanks a lot for the prompt reply, In continuation i request the following.

ASSUMPTIONS

1) I have applied for a bank loan for Rs 40 lacs which i am told it is sanctioned though i am yet to get the letter.

2) i intend to pay token amount of say Rs 1 lac minus the TDS to the seller on signing the MOU .

3)the balance amount of Rs 71 minus the loan amount of Rs 40= Rs31 . From this amount i will deduct the TDS on Rs 71 that is Rs 14.626 and pay the balance to seller . This is because , i understand the bank does not want to deduct the TDS and hence, i am deducting the TDS on both my second payment and the loan amount.

3) The query which i have is, that, since the TDS will have to be paid after bank disperses the loan amount to seller but at the same time bank also wants a confirmation that i have paid my full share which included the TDS also.HOW CAN THIS BE PRACTICALLY SORTED OUT?

i am also NOT supposed to pay the TDS on loan amount unless it is dispersed.

i am sure there must be some precedence and would request your guidance on this.

thanks and regards

pillai

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

1. If NRI seller, procures lower tax deduction certificate from his jurisdictional ITO, your liability will reduce to great extent.

2. Generally bank accept TDS deduction request from buyer, before disbursement of the final loan amount. In that case, TDS payment of last instalment is either done by bank or through buyer's account.

pillai (retired) (37 Points)
Replied 26 October 2016

Thanks for your prompt reply sir,

i have two more queries with your permision sir,

1) The flat is in the name of Husband and Wife,meaning there are two NRIs , so the TDS be equally divided between them or can it be the one person whom seller wants to name?

2)Similarly, we are purchasing in the name of son and father ,son working and father retired. so TDS can be paid by son only ?

pl reply

thanks and regards

pillai

Shivangi Garg (Practicing Chartered Accountant) (110 Points)
Replied 26 October 2016

Sir,

Since you are purchasing property from NRI, you are required to submit Form 15CA and Form 15CB as well before remitting payment towards purchase.

TDS has to be deducted eqaully for husband and wife (assuming they are equal owners of property).

Thanks

pillai (retired) (37 Points)
Replied 26 October 2016

Thanks for the prompt reply,

sir, up till now i was given to understand that the form 27 Q to be filled quarterly for the TDS paid.No mention of forms 15 CA ana 15CB was made ..

1)Can you throw some light that in addiion to form 27Q these forms have to be filled up?

also

2) infom at what stage this form has to be filled up.

thanks and regards

pillai

pillai (retired) (37 Points)
Replied 26 October 2016

sir,

Further to may earlier mail regarding forms 15CA AND 15CB,

i would like to add that all transaction are in Indian Rupees and paid to their account in India. the sellers are also indian nationals with pan cards.

so, is there a need for filling up these forms?

thanks and regards

pillai

Shivangi Garg (Practicing Chartered Accountant) (110 Points)
Replied 26 October 2016

Sir, as per sec 195(6) person responsible for paying to a non-resident any sum (whether or not chargeable to tax in the hands of reciepient) shall funrinsh the information relating to payment in Form 15CA & Form 15CB.

pillai (retired) (37 Points)
Replied 26 October 2016

Sir,

I would request you to please read the following if the trail of mails have not been visible to you.

i am purchasing a property in Pune and paying the total value minus TDS to NRI in India.

i am not repatriating the amount but paying to the NRI in India .i am also deducting TDS at 20%+3% cess and paying the TDS.

in this case also , do i have to file the Fomr 15 ca and Form 15 cb

please clarify

thanks

pillai

Shivangi Garg (Practicing Chartered Accountant) (110 Points)
Replied 26 October 2016

Sir I understand that you are paying to NRI in indian currency in his indian bank account
what i said is in lines with sec 195(6)

Shivangi Garg (Practicing Chartered Accountant) (110 Points)
Replied 26 October 2016

which plainly says that form 15CA and form 15CB are reqyired to be furnished while paying to non resident..

pillai (retired) (37 Points)
Replied 29 October 2016

i am told that since the payment is made to NRO account of the NRI in India in Indian Rupees , there is no need for me as purchaser of property in Pune ,to fill Form 15ca or foem15cb . in any case i will be deducting of tds 20%+3% on the total value of property and paying tax on behalf of NRI with form 281 and filing up the form 27q in the quarterly statement to the bank.

i was further told that the forms 15ca and cb has to be filled by NRI-seller if he wants to repatriate the amount out of india.

kindly , clarify if my understanding is correct and if not tell the correct method

thanks and regards

pillai

Shivangi Garg (Practicing Chartered Accountant) (110 Points)
Replied 29 October 2016

sir, the rules have been changed recently nd now the onus to submit form 15ca & form 15cb has been shifted to buyer. Its an extended compilance alongwith tds and form 27q.

Having said that i would suggest you to approach your Chartered Accountant for more clarifications.

Thanks

Shivangi

pillai (retired) (37 Points)
Replied 19 January 2017

My son is purchasing a flat costing approx. Rs 70 lacs from NRI and I was informed that the TDS to be 20.6 including cess . Now , the seller has got TDS Deduction certificate from AO in the name of my son authorizing my son to pay income tax on Rs 70 lacs at the rate of 0.5(excluding cess/surcharge as applicable) to the seller. Hence , I would like to know the following 1)as the tds certificate is obtained from AO , the income tax percentage is only 0.5+cess and not 20.6%.please confirm 2)In this case since the income tax is less than Rs 5 lacs , I hope there is no need for FORM 15 CA AND CB. please confirm 3)one of the NOTE in the TDS certificate of AO , indicates that I can verify the available amount against the aforesaid certificate on traces portal of CPC(TDS) www.tdscpc.gov.in. please clarify what is the meaning of available amount thanks and regards pillai