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Tds u/s 195

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gauri gokhale (Querist)
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03 February 2021 My brother is purchasing a house property for 40L in pune from a seller who is an NRI. For NRI buyer has to deduct tds u/s 195 @20% or 30% as the case maybe. But seller can make an application to income tax department under form 13 for lower deduction of tds. So in our case seller has made an application to deduct tds @1% but has not received the certificate for the same. And seller has asked to make agreement to sale and deduct tds @1% and make an undertaking that if department doesn't agree then he will pay remaining amount of tds. So can this be done and will such agreement be valid and can bank grant loan on such agreement.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 September 2021 No. Not advisable. Rather deduct full amount as per sec. 195, with the understanding to refund excess amount if the lower deduction certificate obtained before depositing the TDS amount to treasury.

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