Section 195

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 April 2010 If we purchase a flat from a non-resident..
Are we liable to deduct tax U/s 195??
Even if his Capital Gain chargable in India is NIL??????

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 April 2010 For deduction of tax at source under section 195 only consideration would be whether payment of sum to non-resident is chargeable to tax under provisions of Act; sum may or may not be income or income hidden or otherwise embedded therein; scheme of tax deduction at source applies not only to amount paid which wholly bears ‘income’ character but also to gross sums whole of which may not be income or profits of recipient - Headstart Business Solutions (P.) Ltd., In re [2006] 155 Taxman 639 (AAR - New Delhi).