TDS on resale flat - NRI seller
This query is : Resolved
06 July 2022
I am looking to purchase a flat in Mumbai for 1.37 Crs. The seller is an NRI. I am taking a loan of 1Cr and 37Lakhs will be my own contribution. Since I have to deduct TDS on the entire 1.37Crs, what is the percent of TDS that I will I need to deduct since he is an NRI customer and by when do I need to deposit this TDS amount...as in before registration of the flat or after? Also how much time do I have to deposit this?
07 July 2022
You need to deduct TDS on entire 1.37 crs at the rate of 30% plus 4% cess and 7% surcharge.
07 July 2022
TDS to be deducted u/s 195 as applicable for Non-residents.
The TDS is to be deposited by the 7th of the next month.
The TDS is to be deducted on the date of agreement or registration or payment whichever is earlier.
The TDS is to be deposited by the 7th of the next month.
The TDS is to be deducted on the date of agreement or registration or payment whichever is earlier.
12 August 2022
s.195 will come in play in light of payment being made to Non-resident. S.195(1) provides for deduction of tax by a person responsible for paying to non-resident (which will be you in this case) at rates in force.
Since you are buying an immovable property from non resident, whether the proceeds will be subject to LTCG or STCG will be required to be seen. In case the property has been held for more than two years, deduction should be at the rate of 20% and in case of property having been held for less than two years, deduction should be at slab rate applicable.
There might be a possibility for deduction at lower rate or no deduction in terms of s.197(1) of the Income Tax Act, 1961.
Meet qualified International Tax Specialist/ CA/Tax Lawyer with all papers and relevant facts for professional opinion.
Since you are buying an immovable property from non resident, whether the proceeds will be subject to LTCG or STCG will be required to be seen. In case the property has been held for more than two years, deduction should be at the rate of 20% and in case of property having been held for less than two years, deduction should be at slab rate applicable.
There might be a possibility for deduction at lower rate or no deduction in terms of s.197(1) of the Income Tax Act, 1961.
Meet qualified International Tax Specialist/ CA/Tax Lawyer with all papers and relevant facts for professional opinion.
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