Who is Responsible for Paying TDS When Selling Property?

In property transactions involving a Non-Resident Indian (NRI), the buyer holds the responsibility of deducting the Tax Deducted at Source (TDS) from the sale proceeds and ensuring it is transferred to the NRI seller. This TDS deduction is a crucial step in complying with Indian tax laws.

The Buyer’s Responsibility in TDS Deduction

The buyer must deduct the applicable TDS amount from the payment made to the NRI seller. Once deducted, the buyer is required to submit the deduction and payment details using Form 27Q. This ensures that the TDS is correctly documented and reported to the Income Tax Department.

Obtaining a Tax Deduction Account Number (TAN)

To proceed with TDS deductions, the buyer must apply for and obtain a Tax Deduction Account Number (TAN) in their name. This is mandatory for buyers, especially in cases where the property is purchased jointly by two or more individuals, whether they are using personal funds or taking out a joint loan. Each individual involved in the purchase must obtain their TAN.

Depositing TDS and Filing Returns

After securing the TAN, the buyer must deduct the TDS during each payment transaction to the NRI seller. The deducted TDS amount should then be deposited with the Income Tax Department through an e-challan by the 7th day of the month following the payment.

To complete the process, the buyer must file the TDS return in the quarter following the deposit. Upon successful filing, the buyer can obtain Form 16A, which serves as proof of TDS deduction and should be provided to the NRI seller.

Ensuring Compliance and Transparency

By following these steps, both the buyer and the NRI seller can ensure compliance with Indian tax regulations, fostering a transparent and legally sound property transaction. This process helps safeguard the interests of all parties involved and maintains the integrity of the transaction.

Comments

What is Lavani Patta Land?

In Telangana, there are different types of lands titles that provide land ownership. Here Lands are segregated into Private land and Government Assigned Land, and the land owned by an individual who has Record Of Rights ROR on his name, and has legal land title ownership. Whereas government-assigned land is allotted to any individual who belongs to a BPL Below Poverty Level family to elevate their economic standards is termed as Government Assigned Land. Here it has ownership land title on an individual’s name, but assigned lands cannot be sold or transferred to anyone. To obtain a Lavani Patta one can get it from the Revenue Department of the state. The Chief Commissioner of Land Administration (CCLA) is the chief controlling authority for the revenue administration. Usually, the Tahsildar is the competent authority to assign the lands. Here, 50 percent land is assigned to Schedule Castes, 10 percent to Schedule Tribe, 30 percent to the backward classes, and the res...

Top 5 RERA Punishments every buyer must know.

PUNISHMENT PRESCRIBED FOR NON-REGISTRATION OF A PROJECT UNDER THE RERA ACT · 10 percent penalty of the estimated cost of the project. · As per section 59, where under the Act, it is obligatory for the promoter to register a project with the Authority, and the promoter fails to do the same, he shall be liable to a penalty of up to 10 percent of the estimated cost of the real estate project. Non-registration of the project may also liable for 3 years of punishment. · However, in the case of the promoter consistently defaults or does not comply with the directions/orders of the Authority as regards registration of the project with the Authority, he shall be liable to an additional fine of ten percent of the estimated cost of the real estate project or imprisonment up to 3 years or both. Penalty for violation of section 4(App...

Understanding the Limitation Act, 1963: A Guide to Legal Timeframes

The Limitation Act, 1963 , is a crucial piece of legislation in India that defines the time limits within which legal actions must be initiated. It aims to ensure that cases are filed within a reasonable period, preventing indefinite delays and maintaining judicial efficiency. Understanding this law is essential for individuals and businesses dealing with legal matters related to contracts, property, civil disputes, and more. What is the Limitation Act, 1963? The Limitation Act, 1963 , sets specific timeframes within which different types of legal proceedings must be initiated in Indian courts. If a lawsuit is not filed within the prescribed time, the right to seek legal remedy may be lost. The law ensures fairness, prevents misuse of legal rights, and promotes legal certainty by barring outdated claims. Key Objectives of the Limitation Act ✔ Prevents Legal Uncertainty – Ensures that claims are made within a fixed timeframe, avoiding prolonged disputes. ✔ Encourages Timely Justice ...

Fine properties 360

Search This Blog