Capital gain tax-non resident indian selling property

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Walter Z Peter

23 Points Posted on 01 June 2015

Mr Chris a resident of Saudi Arabia, who is Non resident as per income tax act 1961,purchased a residential property in Kerala state in Feb 2011 for rupees 36 lakhs .He wanted to sell the property to a Govt company on July 2015 an Indian Incorporated company with a sales consideration of Rs 2,60,00000/.Govt company is willing to pay entire consideration after deducting tax under section 195 at 20%. on the sales value instead of capital gain portion.

Mr Chris wanted to receive entire sales value without tax deduction as he wanted to buy another residential property for his own usage. Is there any provision in income tax act 1961 which would help Mr.Chris to get entire sales proceeds without deduction @ 20%

Replies (2)

Anubhav

Chartered Accountant

423 Points Posted on 01 June 2015

Dear Mr.Peter,

Regarding saving of tax on sale proceeds, there is a provision in Income Tax Act under section 54 where there will be no liability to tax in case, where sale proceeds from house property is invested in purchase of a house property.Further for allowing the company for not deducting/less deducting the tax the Mr. Chris needs to provide lower deduction certificate under section 197/197A received from the assessing officer.

For any further query, PM or mail me:

anubhavjain176 @ gmail.com

9868729930

manish kumar

C.A

62 Points Posted on 03 June 2015

Dear Mr.Peter,

Mr Anubhav is correct.

Regarding saving of tax on sale of residential house property, there is a provision in Income Tax Act under section 54 where there will be no liability to tax in case, where net long term capital gain from the sale proceeds from house property is invested in purchase of a house property within 3 years from the date of sale of house.

If all long term capital gain is invested into the new house then the long term capital gain is exempted and there is no withholding tax like TDS.

For any further query, PM or mail me: