NRI (though Indian citizen) questions on inherited property

Dear Sir/Madam,

I am an NRI who has the following questions regarding PAN. I am an Indian Citizen but a permanent resident visa holder of another country where I currently live. My parents have passed away in India and I have inherited different properties from them through their registered will. I am going to sell those properties and then bring that money to back to my current country of residence.

Could you kindly help me with these questions and please reply POINT BY POINT:

1) Would I require a PAN number while selling those properties, I mean during sale deeds, selling and getting the property registered in the buyer's name, would I require a PAN number as an NRI?

2) I am going to open an NRO account (or should it be NRE account?) with a bank, would they ask me for my PAN number, do they require PAN of an NRI?

3) When I deposit the draft or the cheque from the buyer after selling the property, would the bank require my PAN number if the amount of draft or cheque is more than 50 thousand INR?

4) When an NRI (also an Indian citizen) sells property, are they required to pay TDS, tax deduction at source if they don't have a PAN number?

5) And if they do have a PAN number then can they deposit the taxes later when they file their taxes of everything they have sold?

6) While filling out the PAN Application online for NRI, I noticed that even though I said I want to pay by Credit Card, and pressed submit, it didn't ask me for my credit card details, how do then I exactly pay for my PAN?

7) I am sending copy of my passport page as a proof of my ID and my driver's licence for proof of my address. Now there are also options that don't talk about them being notarised. So can I just pick those options and send simple copies without getting them notarised. It would be much simpler for me.

I will be highly grateful to you for your kindness. Please reply in detail. Thank you in advance for your kindness.

Kind Regards,

Mr. Singh,

Here are the answers to the questions that you have posted, point by point !

1) Yes you will require PAN for these transactions. The registering authority will not accept the documents without PAN.

2) In your case, you will need a NRO account to credit the sale proceeds. If you need to remit the money in the NRO account outside India, you will need to provide PAN.

3) PAN is required by the bank if the amount is deposited in cash. As mentioned above you will need PAN to register the sale.

4) When a resident person makes payment to any Non Resident, that resident is bound to deduct tax at source if the payment gives rise to income that is taxable in India. Therefore, in your case, when you sell your house to someone in India, theoretically, that person is required to deduct tax at source from the sale proceeds given by him to you. Practically, most people are not aware of this and therefore, they don’t deduct any TDS while making payment to the NRI. In such a situation, as a tax payer, you will need to pay your own tax on the capital gains that you earn in India. As mentioned above, you will need a PAN so once you have the PAN, you can pay the advance tax.

5) Every person earning taxable income in India is required to pay advance tax. For individuals, there are 3 instalments to be paid – by 15th September, 15th December and 15th March. One has to pay tax as the year progresses. Therefore, in your case too, you will need to start paying advance tax immediately after the sale is completed. If the sale takes place after 15th September then you have to pay in December and March. And if sale takes place after 15th December, then you have to pay advance tax in March.

6) You need to send a demand draft / pay order along with your application and documents to the facilitating centre. Please refer to: https://www.incometaxindia.gov.in/.

7) For Non Residents, attestations is compulsory. Forms are not accepted unless they are accompanied by attested documents. Please refer to the list of documents mentioned on the official website https://www.incometaxindia.gov.in/ .

Hope your queries are answered. In case you need to know more, you can visit 'www.nrimatters.com' & post your queries there.

Regards,

NRI matters.

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Singh

Singh

NRI matters

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