Dear All,
My wife and I am buying a property in Pune. The property is in joint ownership of an NRI couple. I have applied for a home loan from HDFC.
Please let me know what are the mandatory documentation procedures i need to
adhere to and what are the compliance procedures under sec. 195 of the Income Tax Act.
Dear Amarkant,
As per section 195 of the Income Tax Act,1961, the person who is paying the sum to a non-resident is responsible for deducting TDS before making the payment or crediting the payment in his account.If he fails to do so he shall be liable for penalty equal to the amount of tax not deducted or prosecution for such failure.
A buyer through whom the income to non-resident arises can be treated as an agent to the non-resident and therefore can be assessed as a representative assessee u/s 160(1).
TDS should be deducted after making an application in form 13 to the A.O u/s 195(2) for determination of the amount on which tax has to be deducted.
Dear Fatema,
One think I would like to mention that the provisions for Deduction of Tax at source aplies only if payments ARE MADE DURING THE COURSE OF BUSINESS/PROFESSION..
So If Mr. Jain is acquiring a property for his PERSONAL USE AND NOT FOR BUSINESS THEN HE IS NOT REQUIRED TO DEDUCT TDS...
Dear Amir,
Please refer the following link
https://www.blogcatalog.com/blog/faq-on-indian-income-tax-laws/d093d2271fa3fd75938957d934d73bdc
Thanks Fatema for correcting me...I was under the impression that TDS is required to be deducted only in course of Business/Profession..
Mr. Amarkant plz follow the link which Fatema has sent for all ur related querie.
Fatema, I would appreciate if u can plz clarify my belief that "TDS is required to be deducted only in course of Business/Profession".. holds good in case of payments to residents or not..
CAclubindia
