I have purchased a house from a NRI through GPA in Apr'11 for Rs.34 Lakhs. Due to lack of awareness, the TDS was not deducted as per sec 195.
The property was purchased by the NRI in Jul'2007 for Rs.26 Lakhs by taking a loan from a bank. Now a notice is recieved from IT dept.(intl taxation) requesting the details of purchase confirmation, TDS deduction details and reasons for not deducting TDS if not deducted.
As per the computation of tax for the NRI, this will come in Long Term Capital gains (above 3.5years), and based on indexed value the cost will be Rs.37 Lakhs in the selling year. hence there will be los in LTCG and infact there is no necessary for deducting tax.
Please advise me to proceed further as i need to reply to IT dept at the earliest.
CAclubindia
