Tds on purchase of property from person residing abroad nri

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2014 Is it mandatory to deduct TDS while making payment in an NR/NRO bank account for property purchase from the seller ( a person of Indian origin who is residing abroad) NRI

The value of the residential house I intend to purchase is less than 35 lakhs.

What is percentage of TDS to be deducted.

Is the purchaser liable if TDS is not deducted.

If the seller dose not declare NRI status and gives local address, local ID proof and local SB bank account #. Then can the TDS be avoided. Or if cash of 35 lacs is paid at time of registration.

How to know the status of a person form his PAN no.

Kindly enlighten

Thanks

CA Kedar Sakhardande

CA Kedar Sakhardande (Expert)
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22 August 2014 1) Yes is is mandatory to Deduct TDS under section 195 (unless the seller produces No Deduction Certificate
2) Even if the value is Rs. 35 Lacs, TDS to be deducted (there is no threshhold prescribed)
3) Deduct TDS @ 20 % on the full amount of consideration (tax rate can be lower if the assessee provides low deduction certificate)
4) Yes purchaser is liable if TDS not deducted
5) Ideally buyer is supposed to know this. It is difficult to answer whether you can plead ignorance
6) You need to check the jurisdiction of PAN

Regards

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