Tds on sale of nri property in india

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Dipin Kwatra (Querist)
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07 August 2017 Hello Members,

I have query regarding the TDS tax implications pertaining to sale of NRI's property in India.

1.Is the 1% TDS deduction applicable on sale of NRI property in India, some say it's applicable only on capital gain and not on total sale proceeds. Also in case there is no capital gain arising, the buyer need deduct any TDS.
2. For computation of capital gain tax, shouldn't we consider the CII - Cost of Inflation index where in the fair cost of property acquisition would rise compared to actual cost of acquisition post taking inflation into account
3.Is it mandatory for the NRI seller to obtain the Capital gain certificate from the IT authorities and provide the same to the buyer so he need not deduct any TDS in case of no capital gain arising.
4. Some website says buyer also need to deduct 20-22% TDS of the total sale consideration, and deposit the same with IT department. But the same may not be applicable in case no capital arising or NRI selling property at a loss.
T
Rgds
Dipin

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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07 August 2017 1. As far as the buyer is concerned the only known variable is the sale amount. Capital gains arising is immaterial as far as the tds is concerned

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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07 August 2017 2. Yes. We use the Cost inflation index given by the IT department.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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07 August 2017 3. Getting a tds exemption certificate will be advisable in case there's no capital gains because given no tax liability arising out of that transaction there's no point in locking the funds with IT department till the nri files the return

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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07 August 2017 4. As I mentioned in my first reply, as far as the buyer is concerned he is bound to deduct tax at source according to the sales consideration. Unless the nri gets tds exemption certificate showing that there are no capital gains or there is loss arising out of the transaction, the buyer has to make tds

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