I want to apply for a Nil rate of TDS certificate u/s 197 for a NRI who is entering in a property sale deal . Regarding this , the sale consideration is of 2 crores , TDS @ 20.6% ( on sale consideration ) is held in escrow a/c by the lawyers , i.e Rs 40.6 lakhs.
Now the issue is out of 2 crores , My client will claim an exemption of 1.5 crores u/s 54 (which also includes the cost of acquisition of the sold property) The balance 50 lakhs will go in bonds u/s 54EC .
But the bond money will only go when the lawyers release the funds from the escrow a/c(cos the client has only received 1.6 crores , balance is in escrow). The money will only be released when we will provide a certificate u/s 197 .
How will the AO issue me a certificate without me providing a receipt u/s 54EC .
Can i provide an undertaking for the same ? my client is not in a position to deposit additional 50 Lakhs in 54EC from his own pocket.
Also i would like to know the set of documents required in this kind of a case to be submitted along with the application of 197 .
CAclubindia
