Nri: property sale where main owner is resident and i was nri

Tax queries 295 views 3 replies

Gurunath Kale

3 Points Joined March 2019

Hi All

Background- I bought 2 bhk flat in Oct 2013 where I had put my mother as main owner and I as co-owner. And taken home loan a joint applicant, where consideration was I will do all the payment my mother being housewife. Agreement was done in Oct 2013 and in Nov 2013 I went abroad for around 5 years. In these 5 years I repaid most of my housing loan using my out of India earnings. I didn't had any earnings in India and didn't paid income tax for year 2015/16/17

Current Scenario- I am back in India for good, in Nov 2018 and holding resident account status and all my NRO/NRE accounts converted to resident account. I have resumed from my India office and started earning in India and will be filing income tax for 2018/19.

I want to sale the flat now (April 2019) with some capital gain associated with it.

Questions-

If I ask buyer to do transaction with me only (that is with my resident bank account and TDS using my PAN). What this means from Tax perspective, should TDS be 22.6 % or 1 %.?
Though property was jointly hold, i don't want transaction with my Mother's account. Would that have some consequences from tax and capital gain perspective?

Hope this experts here can guide me. (TBH, I had discussion with two of my CA friends but got different friends and got two contrasting answers hence want to put these question to this wider forum)

Regards

Guru

Replies (3)

RAMAKRISHNAN R

INCOME TAX OFFICER

1736 Points Joined February 2014

1. the TDS will be deducted at 1% and yourself and your mother have to be the vendors since it's a jointly held property
2. you want it or not, tax will be appropriated according to the percentage of share in the property between you and your mother

Gurunath Kale

3 Points Joined March 2019

Thanks RAMAKRISHNAN R,

1. There was no percentage mentioned in any of the agreements made, then what is default rule around such split.

2. you want it or not, tax will be appropriated according to the percentage of share in the property between you and your mother
- Would this be tax on the the capital gain or entire transaction amount?

RAMAKRISHNAN R

INCOME TAX OFFICER

1736 Points Joined February 2014

1. If the percentage of share is indeterminate then it'll be deemed as 50-50 2. Capital gain will be computed as if it's owned by single person and after computation, capital gain will be appropriated in consonance with the percentage of share (in your case it's 50-50)