I am purchasing a property from NRI in 70 lakhs. He has his previous sale agreement, based on which, after applying indexation, he is not having any capital gains.
As I understand, I need to pay him after deducting TDS @ 20.6% on whole sale consideration (sec 195). However, since there is no capital gain, do I still need to deduct tax on the total amount ? Is there any way to avoid submitting the tax on whole amount ?
thanks for the reply, but Sec 195 says the idea is to avoid tax not being paid. In that case, shouldn't only the liable tax should be deducted ?
Also, if I pay on the whole amount, would the seller be able to claim it back from IT ?
In case of property sale, normally there will be gain but in said case there is no gain.
If you consider that payment towards property does not include income chargeable to income tax in hands of receipient, then make an application to assessing officer to determine the amount on which tax can be deducted. if no income is there then there is no deduction required after application to office. please check for other replys.
The TDS is to be deducted mandatorily on any transaction taken with the NRI in cas of purchase of property from any NRI. The TDS is to be deducted on the transaction value irrespective of quantum of capital gain. The TDS to be deducted should be 1% of the total transaction value if he is having PAN otherwise, 20%. The purchsaser should be having a valid TAN for deducting and paying tax to the govt. The tax so deducted should be paid within 7 days of deduction or transaction.
THE AMMENDMENT HAS BEEN MADE EFFECTIVE SINCE JUNE 1 2013.
TDS is deucted & deposit within time limit NRI having not pan no.tds deducted 20% .
Hi Sunil,
Are you aware of how to find / contact the assessment office ? Request you to let me know. Thanks
CAclubindia
