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NRI - TDS on Sale of Property

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NRI - TDS on Sale of Property

Last updated: September 25 2018
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  • NRI - TDS on Sale of Property

    Dear Sir,
    I am an NRI.
    I have a property bought for 80 Lakhs now selling this for 1 crore.
    Loan form bank is 50 lakh and self finance is 30 lakhs.
    Please let me know the amount of TDS payable.
    Replies will be highly appreciated.
    Best regards
  • #2

    #2

    Re : NRI - TDS on Sale of Property

    Just curious when did you buy the property?

    Comment

    • #3

      #3

      Re : NRI - TDS on Sale of Property

      Originally posted by satishgulati View Post
      Dear Sir,
      I am an NRI.
      I have a property bought for 80 Lakhs now selling this for 1 crore.
      Loan form bank is 50 lakh and self finance is 30 lakhs.
      Please let me know the amount of TDS payable.
      Replies will be highly appreciated.
      Best regards
      Satish,

      there are 2 ways to approach this:

      a) You should apply to Income Tax Office (International Division) giving details of your property purchase and property sale agreement in Form 13A. Income Tax will give you a Tax Deduction Certificate which you need to provide to the buyer on the basis of which Buyer needs to deduct the Tax. If your capital gain after indexation is zero, it is best. However if you have a large capital gains and thus 20.60% tax deduction is large amount, you can apply to Income Tax office with a decleration that you will use these proceeds to invest in Capital Bonds / Real Estate. on this basis you will get a NIL Tax Deduction Certificate

      b) However if you dont apply for the Income Tax Certificate, then according to Income Tax rules, the buyer has to deduct 20.60% of Total Consideration i. e. around 20 lakhs, will deposit it in the TDS account and give you a TDS certificate / receipt. You will have to reclaim the TDS deducted when you are investing in future in Real estate / capital bonds

      Comment


      • bobmeeta1
        bobmeeta1 commented
        Editing a comment
        Have you ever heard of IT Office giving the NRI a tax deduction certificate in real life - sure it exists in theory. My CA says I will need to bribe 10 Lacs or more for such certificate .......
    • #4

      #4

      Re : NRI - TDS on Sale of Property

      Originally posted by satishgulati View Post
      Dear Sir,
      I am an NRI.
      I have a property bought for 80 Lakhs now selling this for 1 crore.
      Loan form bank is 50 lakh and self finance is 30 lakhs.
      Please let me know the amount of TDS payable.
      Replies will be highly appreciated.
      Best regards
      Well there are ways to minimise or completely nullify the taxes. It would be better if you consult a tax consultant for who can surely save you a lot of money.

      Comment

      • #5

        #5

        Re : NRI - TDS on Sale of Property

        Dear NRIs, there's a quick way of understanding and resolving your TDS worries. If your property is on loan, please talk to your banker. They will calculate and let you know the TDS component in your property price.

        Paying TDS well in advance can save your worries.

        Comment

        • #6

          #6

          Re : NRI - TDS on Sale of Property

          I am a NRI I amthinking to buy a home in banglore i would like to know whether i need to pay TDS worth 1 % of value under .Is it the buyer should pay the amount to seller




          Comment

          • #7

            #7

            Re : NRI - TDS on Sale of Property

            I sold my property in November 2015 and the buyer deducted 20% TDS. However the the TDS did not show up on traces.

            My CA says that he cannot file the returns until it shows up on the traces.

            This was due to an error with IT department. IT department intitally mentioned that they are checking on it and now they are saying that it is old and cannot be corrected.

            Now time to file the returns for AY 16-17 has passed and cannot be filed. My CA say he can since this was due to an error by IT department.

            My CA is not taking much interest to get this corrected either.

            What is my option. Can I still file a return through another CA.

            Comment

            • #8

              #8

              Re : NRI - TDS on Sale of Property

              This was one of the mistakes in my life..I bought a property from and NRI and took loan from SBI. - a 1st time buyer story from gurgaon


              Not knowing the consequences untill I had paid the 10% token and approached bank for loan.


              It wasted lot of precious time of my life as it had become an everyday job to visit Bank/ CA/ Court.


              Finally the ordeal eneded in 3-4 months. Here is my experience being a buyer of a property sold by NRI.


              1. Its the poor Buyer's responsibility totally take care of the TDS part, if it gets skipped the IT dept would be after his life.


              2. SBI told me after lot of confusion that I need to deposit 20.66% of the propert sale amount as TDS with Income Tax dept as challan u/s 195. 33% if property is sold within 3yrs ST captial gain, mine was long term capital gain hence 20.66%.


              3. First the TDS needs to be deposited , only then the loan will get disbursed. So the buyer is suffocated and choked to pay token amount(at risk) , then the 20%TDS. So totally 30% of the property value at stake.


              4. Then the buyer needs to apply for a TAN number, as he cant deduct TDS from NRI using PAN number. More pain and waiting for another month.


              5. Then submit TDS return using TAN(buyer) and PAN(seller) in the FY qtr of property transaction using form 27Q, not the usual 26.


              Nobody even experienced CA's or bank are knowing every bit of detail required to process such a transaction.


              Finally I was through all this and my seller had to sum this up in his next ITR return.


              So I dont recommened going through so much hardships unless you are getting a good and cheap deal. I had my token at stake, so took the pain.


              Also I still have doubt that how can the bank analyze that the seller is an NRI. They dont check passports, in my case I told them upfront (huge mistake). My seller even had an Aadhar and PAN as he was previously living in India.

              Comment

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