TDS on property sale by NRI

TDS 274 views 5 replies

Milind Kulkarni

CA Practice

84 Points Joined September 2012

A NRI wants to sell his residential flat in Mumbai purchased during 2006. In this regard:

Is indexation benefit available to NRI for this long term capital asset or not?
What should be TDS rate for this sale transaction? If it is 20%, whether 20% should be on computed capital gains or on gross sale value? I believe it should be on capital gains, but want to be abundantly sure to avoid non-compliance
Is there an option to compute TDS @ 12.50% without indexation or does it have to be compulsorily 20%?

Replies (5)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197267 Points Joined July 2016

Unless the NRI seller obtains 'lower TDS deduction certificate' from his Jurisdictional ITO, it is advisable to deduct 12.50% tax + surcharge+cess over total sell value, u/s. 195 IT act. (when purchased after 22.07.2024)

Milind Kulkarni

CA Practice

84 Points Joined September 2012

Thanks but the flat was purchased in 2006, so will the NRI get indexation benefit? There is no lower TDS rate certificate, so can TDS be done @ 20% after giving indexation benefit to NRI? I am keen to know about availability of indexation benefit after budget 2024.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197267 Points Joined July 2016

Purchaser is concerned about TDS deduction rate. If Seller do not issue any Lower TDS certificate, he is liable to deduct TDS at prevailing rate, which is 12.5% over full sale consideration.

Yes, NRI seller can also get indexation benefit with 20% rate over LTCG, while filing the relevant return.

Vairavanathan K

4 Points Joined August 2024

Can we file TDS return for q3 before the end of q3?

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197267 Points Joined July 2016

According to the regulations, the TDS return for Q3, which covers the period from October 1 to December 31, must be filed by January 31 of the following year. Filing before the quarter-end may lead to errors or rejection. While it's technically possible to prepare and submit the return before the quarter-end.