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Challan for remitting tds made on property purchase from nri

balakrishna R (manager finance) (43 Points)

25 February 2015

Dear sir

Understand TDS on payment of purchase consideration of immovable property from NRI will not fall u/s 194 1A and will be u/s 195. Pls tell which challan we should use Form 26QB or Form 281 for remitting TDS. In case of form 26QB you do not need TAN and need to provide all propery and transaction detail . But in form 281 you need TAN in addition to PAN. Also in form 281 you do not have provision for filling property/ any other transaction details. As an individual chances of having is very few.

Kindly advice

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4 Replies

balakrishna R (manager finance) (43 Points)
Replied 25 February 2015

Pls note form 26QB is meant for U/s 194 1A as per the rule or definition and if the payment to NRI on this transaction has to be made / treated under section 195, how we can use form 26QB Pls clarify

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Arif Ali (Apt Co Advisory) (1230 Points)
Replied 26 February 2015

Ok Balakrishan, please correct me.

Since here section 194IA will not apply as it is non resident. so in this case section 195 will apply. Section 195 provides that if income of NR is taxable in india, then tax will be deduction as per rate in force in law or DTAA if any whichever is beneficial. So here rates in force is not clear.

Provisions for Non Resident Indian :- If payment is made to a Non-Resident then section 194-IA will not be applicable. Rather section 195 will be attracted and TDS is required to be deducted @ 20% + EC & SHEC on the sale consideration, if LTCG earned by NR. Surcharge @ 10% will be applicable if amount paid exceeds Rs 1 crore. The limit of Rs 50,00,000/- is not applicable in case of payments made to NRI’s.

then accordingly challan 281 will be filled up, and so return in form 27Q.

balakrishna R (manager finance) (43 Points)
Replied 26 February 2015

For using Challan 281, you must be a TAN holder and should follow usual TDS process to get credit of remittance on one time -immovable property sale transaction.

As a individual / salary earner it is very remote that you use the TAN no in your life time after the above transaction

Is there any option without getting into the TAN tangle, but still deduct the due TDS amount and remit like the option given in Form 26QB