TDS on SALE of RESIDENTIAL FLAT BY NRI

 X AND YJOINTLY OWN A RESIDENTIAL PROPERTY  FOR WHICH THEY HAVE RECD AN OFFER OF PURCHASE BY A BUILDER . X IS A  NRI  AND Y IS A AMERICAN CITIZEN OF INDIAN ORIGIN

THE BUILDER HAS SAID THAT HE SHALL DEDUCT TDS U/S 197 OF THE IT ACT WHILE MAKING PAYMENT ON THE GROSS AMT PAID

THEQUERY IS THE  XAND Y HAVE DECIDED TO INVEST THE AMOUNT OF CAPITAL GAINS IN RESIDENTIAL PROPERTY

X PROPERTYSHAL PURCHASE IN INDIA AND Y PROPERTY IN USA

 WHETHER THEY BOTH SHALL BE EXEMPT FROM CAPITAL GAINS TAX?

WHAT ARE THE REQUIREMENTS TO BE FOLLWED SO NO TDS IS DEDUCTED BY THE BUILDER AND FROM WHOM THE EXEMPTION  FROM TDS  CERTIFICATE IS TO BE TAKEN FROM?.

STATE REFERENCE AND CLAUSES OR WHERE FURTHER EXPLN FOR THE QUERY CANBE TAKEN FROM

 

 

Replies (1)

Dear Sir,

a) The Section of deduction of TDS is section 195 of The Income Tax Act

b) Section 195 makes it mandatory for the payer (in the given case the builder) to deduct tax at rates in force.

c) The only recourse i.e. to avail non deduction is though Section 195(2) of the Income Tax Act.. which is you need to aplly to the assessing officer explaining the facts and position of the case and he can offer you a lower or Nil deduction certificate

You cannot compute the gains yourself it was decided in a landmark case of Samsung Electronics

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