TDS under section 195
This query is : Resolved
CA Ganesh Karthik
(Querist)
25 May 2011
My query is regarding the purchase of a residential property from an NRI.
(Property located in India)
Is tax u/s 195 deductible on the gross payment to the seller or is it on the amount of Capital Gains arising on such sale?
Eg. If the sale consideration is Rs.50 lakh and the cost to the seller was Rs.45 lakhs, TDS is to be deducted on Rs.50 lakh or Rs.5 lakh? And at what rate?
(Property located in India)
Is tax u/s 195 deductible on the gross payment to the seller or is it on the amount of Capital Gains arising on such sale?
Eg. If the sale consideration is Rs.50 lakh and the cost to the seller was Rs.45 lakhs, TDS is to be deducted on Rs.50 lakh or Rs.5 lakh? And at what rate?
CA. Anuj Gupta
(Expert)
25 May 2011
TDS has to be deducted on 5 lakhs , but the buyer should have adequate proof for the cost of 45 lakhs.
Rate is 20% plus surcharge and cess in case of Long term capital gain.
Rate is 20% plus surcharge and cess in case of Long term capital gain.
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RAHUL SARIA (CA, CS)
(Expert)
26 May 2011
you need to also check out the applicability of DTAA.
CA. Anuj Gupta
(Expert)
27 May 2011
DTAA shall have no role in taxation of capital gains.Capital gains are taxable in the country in which they arise.
shweta bombe
(Expert)
28 May 2011
capital gain tax will be chargable on 5 lakhs. rate will be be depend on long term or short term capital basis.
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