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Tds not deducted on purchase of property from nri. options?

Murali (software engineer) (79 Points)

23 April 2016

Hi,

I purchased property from NRI recently through GPA (of his father). I was completely un aware of the implications and rules of 195. Hence no deduction of TDS made. Sale deed executed two weeks back. What options do I have now. Experts please help me. I just realised it two weeks late and been having sleepless nights since then. If seller submits NIL deduction certificate will it help ? Seller purchased this property just 1 year back from builder. Not sure whether Seller is aware of this or not.

Regards,

Murali

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Shailendra (Consultant) (36 Points)
Replied 25 April 2016

As you purchased the flat 2 weeks back, you have until 7th of next month to deposit 33% of the sale consideration as TDS (short term gain). Assuming you have a TAN no. already. If not you would need to obtain a TAN and if it gets beyond 7th of the month I believe you can still pay the TDS by adding a late fee and interest. Toughest part is asking the seller to refund 33% of the amount you paid him !!

If seller gives you NIL TDs certificate before end of Q1, I think it will help as you can then avoid paying any TDS and file nil-TDS return by 15/7 by quoting the Certificate number. But its surprising the registration happened, most Sub-Registrars I heard do check whether the TDS is cut or not before registering, and those details have to be put in sale deed..