TDS Applicability on Payment to NRI

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INAMUL HAQ ANSARI (Querist)
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26 March 2010 Whether TDS is applicable on payment to NRI for purchase of Immovable Property. If yes, what is rate of TDS?

Whether any exemption for non deduction of TDS. If yes on What Conditions?

CA CHINTAN AJMERA

CA CHINTAN AJMERA (Expert)
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26 March 2010 Not Applicable on any purchase of immovwble property.

Rajeev

Rajeev (Expert)
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18 April 2010 TDS has to be deducted @ 20.6% on SALE CONSIDERATION (not on capital gains )

Rajeev

Rajeev (Expert)
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18 April 2010 Dear Sirs ,

I want to apply for a Nil rate of TDS certificate u/s 197 for a NRI who is entering in a property sale deal . Regarding this , the sale consideration is of 2 crores , TDS @ 20.6% ( on sale consideration ) is held in escrow a/c by the lawyers , i.e Rs 40.6 lakhs.

Now the issue is out of 2 crores , My client will claim an exemption of 1.5 crores u/s 54 (which also includes the cost of acquisition of the sold property) The balance 50 lakhs will go in bonds u/s 54EC .

But the bond money will only go when the lawyers release the funds from the escrow a/c(cos the client has only received 1.6 crores , balance is in escrow). The money will only be released when we will provide a certificate u/s 197 .

How will the AO issue me a certificate without me providing a receipt u/s 54EC .

Can i provide an undertaking for the same ? my client is not in a position to deposit additional 50 Lakhs in 54EC from his own pocket.

Also i would like to know the set of documents required in this kind of a case to be submitted along with the application of 197 .

Thanks in advance

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