TAX DEDUCTION AT SOURCE ON PURCHASE OF A PROPERTY THROUGH FOREGN BANK AUCTION

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A query regarding Tax Deducted at Source (TDS) when purchasing a residential property through a foreign bank auction under the SARFAESI Act. The buyer paid the full amount without deducting TDS, but the foreign bank, which is a non-resident, presented an exemption certificate under Section 195(3) of the Income Tax Act. Advice confirms that if the recipient (the foreign bank) holds a valid 195(3) certificate, TDS deduction is not required.

RAGHAVA REDDY

RAGHAVA REDDY (Querist)
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16 June 2025 I have purchased a residential property through a foreign bank auction( NPA)SARFAESI Act.
I have not deducted TDS % and paid full amount to the bank . I have requestd the bank to refund the TDS amount to deposit to the Income tax department. The foreign bank is saying that they have an exemptions certificate U/S 195(3) of IT Act and they have given the certificate. I understood that the 195(3) is for NRIs. Here the original owner is resident indian. Kindly advice

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 June 2025 The person receiving the payment is a foreign bank, non resident and having 195(3) certificate. You can depend on the certificate and no need to deduct TDS.

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RAGHAVA REDDY

RAGHAVA REDDY (Querist)
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23 June 2025 Thank you very much sir

RAGHAVA REDDY

RAGHAVA REDDY (Querist)
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23 June 2025 Dear CA Seetharaman sir, Can I get your email ID/ Phone Number please? my email is reddymrr@gmail.com.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 June 2025 You are welcome.
rseeraman@gmail.com
9443357248

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