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LTCG for property sale for NRI

17 August 2024

Could someone please guide me if after the latest budget, Can a NRI pick between 20% tax with indexation or 12.5% without indexation. Thanks

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11 Replies

jagdish chhugani (engineer) (1004 Points)
Replied 17 August 2024

DEPENDS BEFORE BUDGET OR AFTER, WAIT FOR FINAL AMENDMENT, I UNDERSTAND AFTER BUDGET 12.5% WITHOUT INDEX BUT PROPERTY PURCHASED BEFORE 01/04/2001 FAIR MARKET VALUE / CIRCLE RATE VALUE.

LOT VEDIOS ON YOUTUBE ON THIS SUBJECT.

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vinesh Bajaj (7 Points)
Replied 17 August 2024

Thanks Jagdish, my property was registered in 2014 and I'm planning to sell it now. But I'm not getting clarity on whether as a NRI I can take the indexation benefit or not. I will be btter off with indexation than the 12.5% tax w/o indexation.

Prashanth (ENgineer) (7 Points)
Replied 17 August 2024

Vinesh, I am also an NRI and in a similar situation as yours as I too am about to sell my property purchased in 2007 and the sad fact is as per the latest budget announcement NRIs cannot claim indexation benefit on sale of property and need to pay 12.5% without indexation. The indexation benefit is available only for resident individuals and HUFs. This change has affected many NRIs like us who will benefit from indexation.

vinesh Bajaj (7 Points)
Replied 17 August 2024

Hey Prashanth, Does that mean we can still apply for Lower TDS certificate so that the buyer doesn't deduct TDS on total sale amount? However, the cost considered will be w/o indexation?

Prashanth (ENgineer) (7 Points)
Replied 17 August 2024

Vinesh, Yes we can still apply for lower TDS using form 13 so that the buyer doesn't deduct TDS on total sale amount, but please ensure that the buyer has the TAN number with him when u sign the sale agreeement as the lower TDS approval tends to take time. Yes the tax computed will be at 12.5% w/o indexation.

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sabyasachi mukherjee (27574 Points)
Replied 18 August 2024

Nri the rate are different

jagdish chhugani (engineer) (1004 Points)
Replied 18 August 2024

REFER FILE ATTACHED, AS PER NEWS FOR RESSIDANT INDIANS ANY PROPERTY PRCHASED BEFORE 23 RD JULY INDEX IS AVAILABLE WITH 20% TAX OR NO INDEX WITH 12.5% WHERE YOU GAIN TAKE THAT FOR LTCG.

https://economictimes.indiatimes.com/wealth/tax/nri-cannot-claim-ltcg-indexation-benefit-while-selling-property-in-india/articleshow/112513443.cms?from=mdr

Attached File : 1015325 20240818164023 memo.pdf downloaded: 62 times

jagdish chhugani (engineer) (1004 Points)
Replied 18 August 2024

What is the Eligibility for Filing Form 13?

If a person's Income falls under any section mentioned in the above chart, and individual’s estimate of tax liabilities justifies the lower deduction or non-deduction of TDS. In such a case, the individual can file Form 13

When Should an Application be Submitted Using Form 13?

The Income Tax Act does not specify any timeline for filing an application through Form 13. The payee has the flexibility to submit an application at any point during the financial year. Nonetheless, initiating the application process at the start of the year is advisable to include income earned throughout the year, considering that TDS is deducted at the time of income accrual.

What are the Required Documents for Filling Form 13?

Signed form 13
Copies of audit reports and financial statements of the previous 3 years
The estimated calculation for the current year and copies of Income statements for the previous 3 years
Copies of the assessment order, income returns, and acknowledgment for the previous 3 years
Projected profit and loss statements for the current financial year
PAN Card
E-TDS return statements for the previous 2 years
Tax deduction account number for the payers
Any other documents relatable to the nature of Income
Previous TDS defaults

The application should be submitted to the jurisdictional Assessing Officer (TDS) within 30 days from the end of the month in which it is received. The Assessing Officer will review the documents submitted and may ask for further explanations and documents before issuing the certificate or rejecting the application. The certificate will specify the rate at which tax is to be deducted/collected or that no tax is to be deducted/collected. The certificate will be valid for the period specified therein or until the Assessing Officer's cancellation.

What is the Procedure for Filing Form 13 for Non/Lower Deduction of TDS?

An application of Form 13 of income tax for non-deduction or lower deduction of the TDS requires to be filled out and can be sent via email or post to the assessing officer.
Form 13 can be filed online or manually; however, taxpayers in Mumbai, Karnataka, and Tamil Nadu can only fill the Form 13 of income tax online for faster processing.
It is advisable to fill the complete form with accurate details for faster processing in the first instance.
If the application is proper, then the Assessing officer will issue the certificate.
A copy of the certificate is attached to the invoice and given to the TDS deductor for a lower deduction or non-deduction of TDS.

Steps to Apply for Form 13 Online

Log into the TRACES portal(https://contents.tdscpc.gov.in/)
Select 'Submit Request'
Choose 'Form 13’
Fill in details, attach necessary documents, such as such as financial statements, tax returns, and any other supporting evidence, and submit.
An acknowledgment receipt will be generated. The Assessing Officer will review and process the submission.

What is the Validity of an Application Made Under Section 197?

Form 13, issued under section 197, is issued for a specific financial year and is valid for the FY in question. It stands valid from the date of issuance throughout the financial year unless it gets canceled by the assessing officer before its expiry.

TDS deducted more than your tax liability? Our team of online CA can help you calculate your taxes and file Income Tax Returns to maximize your refund so you can keep more of what you earn.

https://tax2win.in/guide/implifying-form-13-of-income-tax-for-non-deduction-lower-deduction-of-tds

vinesh Bajaj (7 Points)
Replied 18 August 2024

Thanks Jagdish. Probably my last one, Will the Buyer still deduct 20%+ TDS when NRI is selling the property OR will the TDS deducted will be lower @ 12.5%?