Dear Team,

Good Morning,

I am planning to buy a residential apartment in Goa with an agreement value of more than ₹50 lakh, so TDS at 1% under Section 194-IA will apply.

My situation:

  • I am a Portuguese citizen and hold an OCI card. My wife is an Indian citizen, born in Goa. We both live in the UK.
  • I am the sole earner. My wife has no income or savings of her own.
  • All payments, including the booking amount, instalments and TDS, will come from my own savings, through my NRE/NRO account or inward remittance from the UK.
  • We are governed by the Goa Civil Code, under which spouses have a 50:50 right in the family assets.

My questions:

  1. Is it advisable to add my wife’s name as a co-owner on the Agreement for Sale, given that all the money comes from me?
  2. TDS: If we are joint buyers, how is the 1% TDS split? Does each of us deduct and deposit it on our own 50% share, and file Form 26QB separately or jointly? Does it matter that all the money comes from my account?
  3. Gift and clubbing: If I pay the entire price and she is a 50% owner, is this treated as a gift to my wife? Is it exempt as a gift between spouses? Would the clubbing provisions (Section 64) apply to rental income or capital gains from her share, and would Section 27 treat me as the deemed owner of her share of the house property?
  4. Capital gains: How will the cost of acquisition, indexation (if applicable) and exemptions such as Section 54 work on resale for each co-owner? How will TDS on sale and repatriation of proceeds work for an OCI holder?
  5. FEMA and banking: As an OCI holder, I understand I can buy residential property without RBI approval. Please confirm this, and confirm any conditions on funding the purchase (NRE/NRO or inward remittance, FIRC and bank certificates), and on adding my wife as a joint owner when she is an NRI and the funds come from me.
  6. UK angle: Are there UK tax or reporting implications for us as UK residents, such as tax on rental income or gains, and relief under the India-UK tax treaty? Any UK inheritance tax considerations for Indian property?
  7. Is there a better alternative, such as buying in my sole name and recording my wife’s interest in a will or other document?

Thank you in advance for your guidance.

Warm Regards,

 

Antonio

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