Tds & capital gain tax, return on tds w.r.t nri

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Nilesh (Querist)
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01 June 2015 Hello CA Club, Query : I (NRI) wants to sell a flat in India. I had purchased the flat in India in end of the year 2010 when I was not an NRI for total 49L. Now from last 2 years I am workin in USA and want to sell his flat @ 75L. Looking to the indexations for last year (2014-2015 = 1024) the revised flat cost comes around 71L approx and assuming the index inflation rate this year (2015-2016 = 1100) the flat cost comes around 76L approx. So below are my queries if you please address those: 1. When are the cost inflation index rate for the year 2015-2016 will be declared by Govt? 2. I am working in US and get paid in US, but my PF is still continued by my Indian Employer and as there is only PF component deposited by my Indian Employer in India which is well under the 2.5 Lakhs and which is not at all taxable as per the tax slabs, do I still a NRI for the Govt ? 3. As I hold the flat for more than 3 years and now planning to sell my flat @ 75L , consdering / assuming the current (2015-16 - indexation = 1100 as mentioned above) cost comes around 76L so there seems no capital gain tax at all as I am selling for 75L which is below or worst case equal to index cost. Please confirm if I am considered an NRI , will there be any capital gain tax ? 4. Query o TDS: As there is no capital gain tax as seen above will there be any TDS applicable ? Also whether the TDS (20%) will be on total amount 75L or it will be 1% on the 75L as I am not sure about the NRI status? I do hold the pan card. 5. I will be investing the whole amount in a new under construction property which will cost around 1 Cr so how should I take the exemption of the TDS so that there is no TDS at all ? 6. I will be getting the partial payment (30L) from purcahser and remaining balance from the purchasers Bank (45L) so in this case who will deduct the TDS - purchaser or bank ? and whether there will be any TDS as both amounts are under 50 Lakhs ? 7. the property which is to be sale is having joint owner my sister but there is no sharing ratio provided when we bought the property and I am as the primary owner paying the EMI from starting. So in this case are there any ways to avoid TDS as my sister is Indian resident & joint owner (sister is House wife) . Please help on the above queries at the earliest possible. Regards, Nilesh

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 June 2015 1 It will be declared soon.
2 Yes you are NRI for the Govt.
3 No capital gain tax.
4 No TDS applicable as there is no capital gain.

The tax is to be deducted on income only i.e on the amount of capital gains arising to the non-resident out of the total consideration. But how will the payer determine the amount of capital gains arising to the non-resident transferee. The answer lies in sub-sections (2) & (3) of section 195. Under, the provisions of these sub-sections the payer or transferor/payee may make an application to the jurisdictional Assessing officer to determine the sum of capital gains on which tax is to be deducted. The application to the AO will be made in the prescribed form. The amount determined by the AO will be the amount on which tax is to be deducted. However, if no such application is made by the payer or the payee to determine the sum chargeable to tax, the tax will be deducted on the entire consideration for sale of immovable property.

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