Longterm capital gains

This query is : Resolved

C.S.MADHURANATH

C.S.MADHURANATH (Querist)
Follow

24 January 2019 Dear Sir,
One of my relatives is buying a Residential Property from an Non -Resident in Feb2019.He has already obtained TAN. So whenever he pays to the Non-Resident instalments , he will be deducting TDS at 23.92% and will be depositng to the Central Govt using Challan No.281.
Is it in order?
Once the Registration of Property is completed, Whether he can file 27Q for Q3 by giving details of himself & Non-resident seller or Whether he should wait till Q4 is over?
Further, since TAN is obtained for this particular transaction only, What is the proceedure for surrender of TAN and When should he apply for the same?
Thanks & regards

Z (Expert)
Follow

26 January 2019 TAN was not required to be obtained merely for this transaction.
The deductor must obtain the PAN of the seller. Otherwise, the tax shall be deducted @ 20%.

Please go through this tutorial
https://www.tin-nsdl.com/downloads/TDS/eTutorial_TDS_on_property_etax-immediately.pdf

And this one
[https://www.incometaxindia.gov.in/Pages/tds-sale-of-immovable-property.aspx]

For cancellation of TAN, kindly visit the https://www.tin-nsdl.com
[https://tin.tin.nsdl.com/tan/GuidelinesTanChangeRequest.html]
For Cancellation of TAN, fill all mandatory fields in the Form, enter TAN to be cancelled in Item No.6 of the Form and select the check box on left margin. TAN to be cancelled should not be same as TAN (the one currently used) mentioned at the top of the Form.

CG can has the power to notify the persons who are not required to obtain PAN and these S.194-IA cases are covered

C.S.MADHURANATH

C.S.MADHURANATH (Querist)
Follow

26 January 2019 Dear Sir, Thanks for the reply. As I have mentioned that the SELLER IS A NON RESIDENT. In such a case , obtaining TAN is mandatory. Is it correct? Will your reply will be different in such a case?
Thanks

Upgrade to CAclubindia Pro. Subscribe Now!

Z (Expert)
Follow

26 January 2019 Oh! I reversed the scenario.
Yes, you're right, TAN would be required as S.194-IA is not applicable. But also consider the DTAA, rates therein would be without cess so it might not be +23%.
Further, the deduction should be on the sum which is chargeable to tax and not on the entire proceeds.

S.195(2)
Where the person responsible for paying any such sum chargeable under this Act (other than salary) to a non-resident considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application to the Assessing Officer to determine, by general or special order, the appropriate proportion of such sum so chargeable, and upon such determination, tax shall be deducted under sub-section (1) only on that proportion of the sum which is so chargeable.

[Edit: this 195(2) is kinda optional, but you should consider this for the sake of N.R. if you do not want to opt that then he can file the return and claim the refund of the excess tax deduction.]