LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

FEMA transactions query

18 August 2022

if a person is PRI in India and he purchase an asset in India which belongs to a NR and he makes payment in Foreign currency
which type of transaction it is whether capital or current account?

Reply
Follow
Share

3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 19 August 2022

Under which section TDS was deducted?

1 Like

Adv. Ravish Bhatt, ADIT, CIOT (Dual Qualified Lawyer/ Solicitor International Tax Affiliate CIOT) (1110 Points)
Replied 20 August 2022

I may be missing something here but it is possible to pay in foreign currency for purchase of property located in India? As I understand, it may not be possible.

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 23 August 2022

No My Dear....

You are not missing anything....

You are 100% correct....

To confirm your comment... I would add that the proceeds cannot be credited to NRE account also....

As per FEMA act, even banks will not accept the payment transaction without RBI permission or without certificate of a practicing Chartered Accountant, which as per act, no one will issue.

To add to it, as per IT act... the purchaser needs to deduct TDS from the sale proceeds as per sec. 195 of the act. Without which registration of the deed is not possible...

Finally to conclude... the query is on fictitious ground, practically not possible...

Good Luck ....