Section 194 1A Query for Seller as NRI

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  1. Gaurav Prabhakar

    Gaurav Prabhakar New Member

    For immovable propert of consideration value greater than 50 Lakh,

    The property is in Joint Name of 2 NRI's, of which Mother has Pan card and Son does not have. Does in case of NRI as seller's, do buyer still need to deduct 1% TDS or not?
     
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    In case the property is being sold by NRI, the buyer of property will have to deduct TDS on the capital gain in the hands of the NRI @ 20%.

    The logic is here that in case of sale of property by NRI, the total tax liability of the NRI would be required to considered and then the tax leviable thereon would be required to be deducted as TDS.

    Therefore the TDS Rate in this case would be 20% of Capital Gains arising in the hands of the NRI
     
  3. Gaurav Prabhakar

    Gaurav Prabhakar New Member

    Ok.

    Is buyer liability or Seller has to pay from total consideration money?
     
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    At the time of payment, the buyer will be required to deduct TDS and pay the balance amount to the seller.
     
    Gaurav Prabhakar likes this.
  5. Gaurav Prabhakar

    Gaurav Prabhakar New Member

    Hello
    In case buyer does not deduct at the time of transaction then what is the issue or liability.?
    Second, Is there ny provision where in seller does give some document which suggest no deduction for buyer of this 1% TDS.?
     
  6. Gaurav Prabhakar

    Gaurav Prabhakar New Member

    I was reading few more articles "Cost Inflation Index" and I understood through this incase where seller has not made long term capital gain so no TDS to be deducted by buyer. Is it true? Kindly reply ASAP in this context.
     
  7. Gaurav Prabhakar

    Gaurav Prabhakar New Member

    Also note Seller has holding of 36 months.
     
  8. gaurav_kumar

    gaurav_kumar Well-Known Member

    In case the property has been held by the seller for more than 36 months, it would be classified as a long term capital asset and the seller can make use of the Cost Inflation Index.

    This will reduce the tax liability of the seller but the tax liability will not become zero. Tax would still be required to be paid.
     
  9. gaurav_kumar

    gaurav_kumar Well-Known Member

    Please note that 20% TDS deduction is on the total taxable capital gains and not on the total sale price.

    However, if the tax liability of the seller is Nil - no tax is required to be deducted.

    The tax liability of the seller can be reduced to Nil if the seller reinvests the capital gains in a residential house or purchases capital gain saving bonds issued by NHAI or REC.

    Refer this link on how the exemption from capital gains can be claimed - http://www.charteredclub.com/section-54/
     
  10. Gaurav Prabhakar

    Gaurav Prabhakar New Member

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