How do I deduct TDS and submit it for a housing property purchased from an NRI?

How do I deduct TDS and submit the identical for a housing property purchased from an NRI?

Answer: As per the provisions of Section 195 of Income Tax Act, any one who pays any sum of cash which is chargeable to tax in India, to a non-resident has to deduct tax on the revenue portion of the cost being made to the non-resident. Unlike for buy of property from a resident the place you need to deduct tax at 1% on the worth of the property bought if the consideration for buy of the property exceeds 50 lakhs, no such threshold restrict is prescribed for deduction of tax on buy of property from a non-resident. Moreover, in case of buy of property from a non-resident, you need to deduct tax on the revenue element of the sale consideration at 20% if the beneficial properties are long run within the fingers of the non-resident else 30% tax needs to be deducted. 

For depositing the tax deducted from cost made to a non-resident, to the credit score of the federal government, you need to get hold of a tax deduction account quantity (TAN) whereas for buy of property from a resident vendor, you should not have to acquire any TAN quantity, you simply want PAN variety of the vendor and the client. The type no. 26QB is serves as challan cum return in such case and no separate TDS return is required to be filed. The purchaser is required to deposit the TDS so deducted to the Government inside a interval of seven days from the tip of the month wherein the TDS has been deducted in each the circumstances. In case of buy of property from a non-resident the client is required to deposit the TDS via Challan No. ITNS 281 and the purchaser is required to submit the TDS return in Form 27Q by prescribed time. Since you need to get hold of TAN and file TDS return in case of buy of property from a non-resident, it’s advisable to avail the providers of a Chartered Accountant to adjust to regulation correctly.

Balwant Jain is a tax and funding knowledgeable and may be reached at jainbalwant@gmail.com and @jainbalwant on twitter.

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