Frequently Asked Questions On Non-Resident Indian

Ques 1:- How can NRI selling property in India with Nil capital gain avoid deduction of TDS?

Ans 1: NRI selling property in India can get a full waiver of tax in case his capital gain tax is NIL by applying to the Income-tax authorities of the same jurisdiction as their PAN and apply for Tax exemption certificate under section 197 of The Income Tax Act.

Frequently Asked Questions On NRI

Ques 2:- What is the checklist to avoid TDS on sale of property by NRI?

Ans: NRI selling property in India have only one way to avoid TDS on sale of a property and that too by filing online application Form (Form 13) for getting lower TDS or No TDS certificate.  Following is the checklist for applying for FORM 13:

  • PAN CARD copy.
  • Passport copy.
  • Income Tax return copies of the last 2 years.
  • TAN of the buyer.
  • Capital gain computation along with supporting documents to the transaction.
  • Any other document as required by the Income-tax department/

Ques 3:- Can NRI apply for lesser TDS in case of sale of a property?

Ans 3: Yes, NRI can apply to his jurisdictional Income Tax officer to get his capital gain computed and grant him a certificate in which he is eligible to get his lower TDS deducted as per that calculations.

nri Sell Property

Ques 4: Can NRI take credit in foreign countries for TDS  deducted on sale of immovable property in India?

Ans: To ensure whether your country allows you to get the credit of TDS deducted in India, you must check with DTAA (Double Taxation avoidance agreement) signed between India and your country. India has signed DTAA with many countries so that your income should not be taxed twice in two countries for a single income. So, your country will allow credit over this transaction or not shall be only confirmed by relevant DTAA provisions.

Ques 5: What is the Tax for NRI selling property for Rs. 2.28 crores?

Ans 5: If such property is being sold within 2 years of its purchase then short term capital gain will apply and TDS shall be deducted @ 30% and in case NRI is selling a property after 2 years then long term capital gain will apply and TDS shall be deducted @ 20%. As the value is more than Rs. 1 crore surcharge on LTCG rate shall also be applicable @ 15% and cess of 4%.

Ques 6: Is indexation benefit available to NRI on the sale of residential house property in India?

Ans: Yes, Indexation benefit is available for both cost of acquisition and cost of improvement to NRI in case he is selling his residential property after 2 years of purchase. In case he is selling before two years then the capital gain will be short term capital gain and no indexation benefit will be available for that. 

Ques 7: What is the TDS rate for buying a house in India from NRI?

Ans: Following are the rate of TDS under section 195 when the seller of immovable property is NRI:

NRI is selling within 2 years:

If NRI is selling a house within 2 years then it shall be considered as short term capital asset and TDS shall be deducted @ 30% + applicable surcharge and cess.

NRI is selling after 2 years:

If the property is long term capital asset and NRI is selling it after two years then TDS shall be deducted @ 20% + applicable surcharges and cess.

Ques 8: Can we get the refund of TDS deducted on the sale of a property?

Ans: Yes, we can get the refund of excess TDS deducted then our actual Income tax liability by filing our Income Tax return and by providing relevant calculations for tax and details of TDS deducted.

Lower TDS Certificate On Sale of Property

Ques 9: What are the things to be kept in mind while purchasing the property from NRI in India?

Ans: Following are the checkpoints to be taken care of if you are purchasing the property from an NRI:

  • You are liable to deduct TDS and you must have TAN.
  • Must get the PAN of the seller for Income Tax compliances.
  • Deposit money of sale consideration in NRO/NRE or FCNR accounts only
  • The presence of the seller or proper POA must be ensured at the time of deed execution.

Ques 10: Is TDS is required to be deducted in case NRI selling property in India is having loss from that Transaction?

Ans: Yes, the Buyer has to deduct TDS on sale consideration value irrespective of Capital gain/loss of NRI. However, NRI can get Tax exemption certificate by applying in Form 13 to his jurisdictional Income Tax officer and avoiding getting deduction of TDS.

Ques 11: How to amend the TDS lower rate certificate?

Ans: TDS lower rate certificate is issued by the jurisdictional Income Tax officer and in case any changes required in that certificate that could be done by Income Tax officer or a fresh application can also be made for the same transaction and if the assessing officer thinks fit he can approve the another amended application for Lower rate TDS certificate.

Ques 12: Can NRI able to get the refund of TDS on sale of property in India?

Ans: NRI will get the refund of TDS on sale of property in India only if his computed Tax liability is less than the TDS amount deducted then he will get balance excess TDS deducted as a refund. So, NRI can get refund only if he files his income tax return and provides relevant details and his TDS deducted is more than his computed Income Tax liability.

Ques 13: If we get an option to sell a property before as well as after becoming an NRI, what option should we opt for?

Ans 13: If you have option that you can sell property before becoming an NRI, then you must opt for that because in case of NRI there is TDS rate of 20% or 30% to be deducted under section 195 from buyer but in case of both seller and buyer are residents then TDS shall be deducted under section 194IA at the rate of 1% only if the sale consideration of property exceeds Rs. 50 lakhs.

Ques 14: How to deposit TDS on the purchase of property from NRI?

Ans: If you are purchasing the property from NRI then you must have your TAN and you can pay TDS under section 195 through online using this link https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp or offline mode by payment in a bank through CASH. TDS must be deposited within 7 days from the end of the month in which TDS is deducted.

Lower TDS Certificate

Ques 15: What are the documents required for NRI to buy property in India?

Ans: Here is the list of documents required for NRI while purchasing a property in India:

  • Sale/Purchase Deed.
  • Pan Card.
  • Passport.
  • Citizenship proof.
  • Address poof.
  • Registered Power of attorney in case NRI is not physically present at the time of execution of sale deed.

Ques 16:- Can deduction of TDS be avoided on the sale of property in case the seller provides the lower deduction certificate?

Ans 1:  If assessing officer issues the lower deduction TDS certificate to the seller and the seller provides that certificate to the buyer so that buyer shall deduct TDS at a lower rate at specified in the certificate then the buyer cannot deduct more TDS than the rate mentioned in that certificate and deduction of TDS can be avoided.

Ques 17:- What will be the legal advice for NRI  buying property in India?

Ans: Following are some of the legal advice which should be taken care of by the NRI before purchasing any immovable property in India:

  • NRI can invest in any immovable property except agricultural, plantation and farmhouse property.
  • Investment in Immovable property must be made in accordance with the FEMA provisions mentioned above to avoid any violation.
  • The physical presence or in case if not possible Power of attorney must be registered to avoid any hassle.
  • Funds must be invested and bringing into the country as per RBI guidelines only.

Ques 18:- What is the minimum TDS requirement for transactions related to the sale of property in India?

Ans: In case of buyer and seller both are residents then TDS on sale of immovable property shall be applicable and liable to be deducted u/s 194IA at the rate of 1% of sale consideration if sale consideration is more than Rs. 50 lakhs.

Ques 19: Does NRI have to pay TDS and CGT (Capital Gain tax) together in case he sells property in India?

Ans: When NRI sells any property in India, then buyer is liable to deduct TDS at the rate of 20% (plus applicable surcharges and cess) of Sale consideration in case NRI is selling property after 2 years of its acquisition however if NRI is selling property within 2 years of acquisition then buyer is liable to deduct 30% TDS with applicable surcharge and cess.

NRI has to file his Income-tax return and shows the calculation of capital gain tax and if his full TDS has already been deducted by the buyer then he needs to show capital gain tax in his ITR and claim excess TDS deducted as a refund.

nri tax

Ques 20: Is there any other TDS other than 20% in case of sale of property by NRI?

Ans: No, In case of sale of property by NRI there is only either 20% deduction of TDS or 30% deduction of TDS depends upon the period of holding of property by NRI along with applicable surcharge and cess and apart from this no other TDS will be there.

Ques 21: Can NRI apply for lower deduction of TDS on sale of a property?

Ans: Yes, NRI can apply to his jurisdictional Income Tax officer in Form 13 for lower or no deduction of TDS by furnishing relevant proofs and calculations for his capital gain and if the officer satisfies with the validity of claim he will grant him a certificate on the basis of which he can avoid excess deduction of TDS from buyer.

Ques 22: What is the threshold limit after which TDS has to be deducted in case of the purchase of property from NRI?

Ans: There is no such threshold limit in case of purchase of property from NRI for deducting TDS. Irrespective of amount TDS shall be deducted at the rate of 20% plus surcharges and cess (In case of property is being sold after 2 years) and 30% plus surcharges and cess (in case of property is being sold within 2 years).

Ques 23: Is it mandatory to deduct 1% TDS in case of the sale of a property?

Ans: No, 1% TDS u/s 194IA shall only be deducted in case the value of sale consideration is more than Rs. 50 Lakhs. And it is mandatory to deduct 1% TDS by the buyer while paying the net payment of sale consideration to the buyer. However, this rate of TDS shall be applicable only in case, where the seller of the property is resident.

Ques 24: Is TDS  need to be deducted on the sale of property by NRI?

Ans: Yes, Irrespective of the amount of sale consideration buyer needs to deduct TDS at the rate of 20/30% depends upon the period of holding by NRI. So it is the liability of the buyer that he shall deduct TDS at the prescribed rate with surcharge and cess as applicable irrespective of the amount of sale consideration.

Ques 25: What is the TDS on sale of property by NRI having a value above Rs. 1 Crore?

Ans: In case of sale of property by NRI having value more than Rs. 1 Crore and period of holding is more than 2 years, TDS shall be deducted at the rate of 20%  + surcharge of 15% of Tax + 4% Cess of Tax and surcharge and effective rate at which TDS should be deducted shall become 23.92%.

TDS CERTIFICATE

Ques 26: Is there any latest news over TDS for NRI Property in India?

Ans: As there is not any fresh announcement in this recent budget of 2020 for TDS for sale of property by NRI in India. But the recent announcement is this only that the holding period of 2 years of property shall be considered as long term capital asset now.

Ques 27: Can a recently became NRI sell his 5 years old residential property and remit the proceeds?

Ans: Yes, There is no such restriction for NRI to sell his property even he recently becomes NRI  and he can repatriate the proceeds as he recently became NRI so there is not any specific restriction for him in FEMA also.

Ques 28: Is the TDS rate of 1% for the purchase of property from NRI?

Ans: No,  This is the misconception between most of the people as a rate of TDS is 1% while purchasing property from NRI. TDS rate should be 20% or 30% depends upon the holding period and deducted from the sale consideration while purchasing the property.

Ques 29: Is TDS to be deducted from the sale of a property?

Ans: TDS is applicable and needs to be deducted on the sale of property transactions is depends upon its value or sale consideration. If the value of a property is up to Rs. 50 Lakhs then no TDS should be deducted and if the value of a property is more than Rs. 50 Lakhs then 1% TDS shall be deducted from sale consideration while making payment of the property.

Ques 30: What are the quick things to be checked before purchasing the property from NRI?

Ans: Follow is the checklist need to be checked before purchasing the property from NRI:

  • Special Power of attorney in case NRI is not physically present at the time of sale.
  • Permanent account number of the seller for the purpose of TDS.
  • Statutory requirements and approvals if required.
  • Sale consideration should be settled in the designated bank account only.

Ques 31: Is it the responsibility of buyer to pay property tax while purchasing the property from NRI?

Ans: In India stamp duty and registration charges are borne by the buyer only and there is no difference in case the seller is Indian or NRI the property tax or stamp duty shall have to be borne by the buyer only.

Ques 32: What is the TDS needs to be deducted on sale of housing property by NRI?

Ans: In the case of the short term: TDS shall be 30% of sale consideration plus applicable surcharges and cess

        In the case of the Long term: TDS shall be 20% of sale consideration plus applicable surcharges and cess.

Ques 33: Is TDS deducted on sale of a property should be shown in sale deed of property?

Ans: TDS is also a part of sale consideration and doesn’t effect sale deed and it is not required to mention amount of TDS in sale deed of property.

Ques 34: Can NRI claim exemption of TDS deducted while the sale of property in India?

Ans: NRI can claim exemption of TDS while furnishing his Income Tax return of that year and he can get the refund of TDS deducted excess over his self assessed Income Tax Liability. Also if DTAA signed by the Indian government with the country of NRI then he can also get the benefit of tax paid in India in his home country also.

Ques 35: how TDS will be deducted if  2 NRIs are selling property in India having value of Rs. 72 Lakhs?

Ans: TDS shall be deducted on the basis of ownership of both NRIs and according to their share in property PAN of both the NRIs shall be furnished and TDS in the name of both shall be deducted while making the payment of sale consideration.

Ques 36: Do NRI have to pay tax in India after selling his property?

Ans: TDS of NRI shall be deducted from his property in India from sale consideration at full Tax rate instead of deduction over Capital Gain portion only. So, there would be no requirement for payment of excess tax in India. However, NRI can seek refund of excess Tax deducted by calculating tax after adjusting Cost of acquisition and cost of Improvement from sale consideration.

Ques 37:- How NRI can lower his deduction of TDS in case of sale of property in India?

Ans:  NRI can file Form 13 to his jurisdictional Assessing officer in which he requests for lower or no deduction of TDS by specifying certain reasons and facts of the transaction to compute capital gain like the cost of acquisition, Improvement, etc. If an assessing officer satisfies the validity of the application he can issue NRI the lower deduction certificate.

Ques 38:- If NRI has a PAN card of India can he sell property with only 1% deduction of TDS?

Ans: No, TDS is deducted based on the residential status of the assessee and not on the basis of the fact that whether a person is having PAN card or not. So, as the residential status of NRI is nonresident, his TDS shall be deducted as per Section 195 at the rate of 20/30% and not at the rate of 1%.

Ques 39: In case of sale of a flat by NRI to resident and Indian buyer claims money for the delay in depositing sale proceeds due to delay in getting TAN number. Is there any effect on NRI for this?

Ans: It is the responsibility of the buyer to deduct and deposit TDS with the government on time. In case the buyer is taking some time and delaying in depositing TDS then he is solely responsible for all the interest or penalties and the seller has no obligation in this matter.

Ques 40: What are the important things an NRI must know before selling property in India?

Ans: Following things must be taken care of by NRI selling property in India:

  • FEMA compliances.
  • Repatriation of funds rules.
  • Filing of ITR and claiming certain exemptions u/s 54.
  • Power of attorney benefit if he can’t physically present himself.
  • Filing of Form 13 to get a tax exemption certificate.

nri Sell Property

Ques 41: Can not pay TDS on a property in advance?

Ans: when NRI sells property in India then the buyer needs to deduct and deposit TDS at the time of sale consideration paid to the NRI. There is no responsibility for NRI in this matter if he is selling property in India.

Ques 42: Does TDS on sale of property apply to NRI?

Ans: Yes, Section 195 comes into picture when NRI sells any property in India then the buyer is responsible for deduction of TDS at the rate of 20 or 30% depends upon the period of holding of NRI. And accordingly no matter a person is non-resident, TDS in case of sale of the property will also be applicable to NRI.

Ques 43:How can we compute total TDS payable on sale or flat by NRI?

Ans: Under section 195, TDS shall be computed on sale consideration and shall be deducted by a buyer from sale consideration. TDS calculation shall depend upon 2 things: one is period of holding of NRI i.e if a period of holding is up to 2 years then the TDS rate shall be 30% and if the period of holding is more than 2 years then TDS shall be applicable at the rate of 20%.

And the second factor over which TDS calculation depends upon is its sale consideration because apart from TDS basic rate there is also needs to deduct surcharge and education cess from sale consideration.

Ques 44: Can I purchase a property from NRI without deducting TDS?

Ans: No, As per section 195 irrespective of sale consideration, TDS shall be deducted from the sale consideration while making payment to NRI at the rate specified. However, NRI can request to Income Tax officer to waive off TDS by applying for the TDS exemption certificate in Form 13 but the buyer himself cannot escape from this responsibility.

Ques 45: What is the time limit for the issue of a TDS certificate?

Ans: TDS certificate or Form 16 A shall be issued by the deductor to the deductee and it shall be issued within a maximum of 15 days from the due date of furnishing the TDS return.

Ques 46: Is TDS deducted on the sale of property by NRI refundable?

Ans: Yes, NRI can claim the refund of excess TDS deducted than his actual self assessed tax liability while filing his return of income just like normal residents claim.

Ques 47: How much is the total Tax applicable to NRI selling properties in India?

Ans: NRI selling property in India shall be liable to pay capital gain tax along with applicable surcharges and Cess. The capital gain tax shall be calculated on the basis of the period of holding of property by NRI. If a period of Holding by NRI is up to 2 years then 30% capital gain tax shall be levied and if it is more than 2 years then 20% long term capital gain tax shall be applicable.

Ques 48: Please give some examples of TDS on immovable property to NRI.

Ans: I will show 2 examples on TDS of immovable property in case the seller is NRI:

Example 1: Sale consideration is Rs. 45 Lakhs and the period of holding are 16 months.

In this case, TDS shall be deducted at the rate of 30% of Rs. 45 Lakhs even if its value is less than 50 Lakhs because here seller is NRI.

Example 2: If sale consideration is Rs. 250 Lakhs and the period of holding is 5 years.

In this case, long term capital gain tax at the rate of 20 % shall be applicable + 15% surcharge + 4% cess. The effective rate comes out to be 23.92% TDS shall be deducted from Rs. 250 Lakhs.

Ques 49: How TDS is to be deducted if one-third of a property is owned by an NRI other two are residents?

Ans: In case joint ownership of NRI and Residents, a buyer needs to deduct TDS at the rate of 1% of the share of resident and 20 or 30% on the share of NRIs while making payment of sale consideration.

Ques 50: How much TDS is to be deducted if the seller of the flat is NRI and he will keep that sale proceed in India itself and flat is 1 year old?

Ans: In this case as the seller of Flat is NRI and flat is one year old then TDS shall be deducted at the rate of 30% + applicable surcharges + cess depending upon the sale consideration. It is immaterial that NRI is not repatriating his sale proceeds out of India but if he is selling property in India his TDS shall be deducted under section 195.

Ques 51: Is there any risk to pay TDS on a property to NRI before the sale deed?

Ans: TDS should be deducted on the value of the property mentioned and decided in the sale agreement. If sale deed is not yet finalized or may be due to any reason sale could not be performed then it is, of course, risky to block funds by making payment of TDS as a liability of TDS is not yet come to you. So it is suggested to pay TDS after making sale deed and while making payment to the NRI of sale consideration.

Ques 52:- Which form be used for the return of TDS for NRI?

Ans: TDS for NRI is deducted under section 195 and the deductor needs to mention the details of TDS in FORM 27Q.

Ques 53: Can NRI having the property in India get TDS credit which is deducted from sale consideration?

Ans: Yes, NRI needs to file his income tax return and how his computation of Tax deducted and self-assessed his income tax liability. Any excess of TDS deducted from his tax liability shall be allowed as credit/refund in Income Tax return.

Ques 54: I am NRI, I am selling my property value of Rs. 45 laces. Can I avoid a TDS deduction?

Ans: As you are an NRI, irrespective of your sale amount, a buyer needs to deduct TDS from your sale consideration under section 195 of The Income Tax Act, 1961. But you can request to your jurisdictional Assessing officer to grant you a lower deduction certificate or no deduction certificate by applying through Form 13.

Ques 55: Is there any limit to pay TDS up to 50 lakhs if NRI sells a property to a resident of India?

Ans: This limit of Rs. 50 lakhs is applicable if both the buyer and seller are resident in India. In the case of the seller is NRI, the buyer has to deduct and pay TDS on sale consideration under section 195 without any threshold limit.

Ques 56: Can I purchase land from NRI and deduct TDS without having a TAN number?

Ans: No, you have to apply for a TAN number in case you are deducting the TDS of NRI. the option of not having TAN number for deducting TDS is available if the seller is a resident of India but in this case, you cannot deduct TDS without having TAN number.

Are you planning to sell your property as an NRI_

Ques 57: What is the processing time to receive a nil TDS certificate from an assessing officer?

Ans: Assessing officer dispose of the request for Nil TDS certificate within 30 days from the end of the month in which the application has been made to the assessing officer.

Ques 58: Can NRI get relief of TDS on sale of house property?

Ans: Yes, NRI can ask for a refund of excess TDS deducted than his self-assessed tax liability through his Income-tax return after showing all his calculation regarding long or short term capital gain.

Ques 59: In India being an NRI buying house does have an aadhar card is it mandatory?

Ans: No, it is not mandatory to have adhaar card for purchasing a house in India. Most of the states are accepting adhaar card as proof of identity while registration of properties but still it is optional on the party and not a mandatory condition.

Ques 60: Do did not have to pay property tax for the property sold in India?

Ans: No, Property tax or stamp duty is always borne by the buyer of the property and in case of property being sold by NRI also the buyer is liable to pay property tax and NRI is free from this responsibility.

Ques 61: Registration done without paying TDS in case of NRI property is it legally valid?

Ans: Yes, If we talk about registration of property it cannot be invalid merely on the basis of TDS not deducted by the buyer. In the income tax act, the buyer is treated as assessee in default who did not deduct the TDS of NRI but the registration done still remains valid.

Ques 62: Does NRI selling a property need to pay TDS upfront?

Ans: When NRI is selling the property to a resident buyer then the buyer is liable to deduct and pay TDS to the government at the rate specified under section 195 of the Income Tax Act, 1971 and NRI is nothing to do with TDS payment in this case.

Ques 63: Can an NRI buy property abroad after selling his property in India?

Ans: Yes, In case NRI is selling property in India then he needs to comply with FEMA regulations in case of repatriation of funds to his country from India and Indian government any Indian law is nothing to do with what NRI is doing with that fund now. So there is no restriction over this to buy another house abroad by NRI.

Ques 64: Can a property be sold by NRI on special Power of attorney (POA)?

Ans: Yes, NRI if cant himself physically present in India during the execution of sale deed then he can authorize any other person to act on his behalf for executing the sale of that property issuing power of attorney  (POA) in this matter.

Ques 65: Can the to allow lower ads for the property sold by NRI?

Ans: Yes, NRI’s jurisdictional Income tax officer has the authority to issue lower or even no deduction TDS in case he is satisfied that assesse is actually liable to tax lower than TDS rate on that sale of a property transaction.

Ques 66: Can NRI sell property in India without paying TDS?

Ans: NRI is nothing to do with TDS. The buyer is responsible to deduct TDS from sale consideration while making payment to NRI. NRI can avoid this deduction by applying to his assessing officer through Form 13 and if AO satisfies the claim of NRI he can issue lower deduction TDS to NRI and NRI can avoid deduction of TDS by providing this to the buyer.

Ques 67: Can the money be transferred to an NRI in the US directly online after selling the property in India?

Ans: In case you are buying a property from NRI then you must pay NRI the consideration in seller’s Non-resident ordinary (NRO), Non-resident external (NRE)  or Foreign currency Non-Repatriable (FCNR) account only.

Ques 68:  If I am an NRI to whom should I approach for selling my property in Mumbai?

Ans: You can refer many online websites providing online services regarding this and also you can involve any of your Indian friends or relative in this transaction to securely execute the deal so that no one can fool you.

Ques 69: How can I get to know that TDS has been deposited in our name and TDS certificate is issued or not?

Ans: You can check the status of TDS deducted and deposited in your name by every deductor by logging into your account at the income tax website and check at Form 26AS. Form 26AS is the proper authentic record about your TDS deposited by the deductor in your name.

Ques 70: Can an NRI not reveal his identity so as to not pay TDS during the sale of a property?

Ans: As there is the responsibility of the buyer to deduct TDS so the buyer should properly check through documentary evidence and confirm the residential status of the seller before entering into the transaction.

Ques 71: How much time is taken by the Income Tax department to issue a lower deduction certificate to NRI in case of sale of property in India by NRI?

Ans: Income Tax department should dispose of the request for a grant of lower deduction certificate within 30 days from the end of the month in which that request for a lower deduction has been made by NRI to Assessing officer.

Ques 72: Is TDS needs to be deducted at every installment when a property is being purchased from NRI?

Ans: Yes, In case of sale consideration is paid in installments then the buyer should deduct TDS from every installment.

 Ques 73: Where NRI can apply for a waiver of TDS in case of sale of property in India?

Ans: NRI can apply to his jurisdictional Assessing officer for getting a lower deduction or even no deduction certificate by submitting relevant claims of his eligibility to lower his TDS. He can apply this through Form 13 which can be filed through online or offline mode both.

Ques 74:- What is the tax compliance in case of home loan taken by the buyer while purchasing the property from NRI?

Ans:  In case home loan is taken while purchasing the property from NRI then TDS needs to be deducted by the buyer under section 195 when he will pay sale consideration to the NRI and not when he will pay installments to the bank for repayment of home loan taken fur purchasing the house from NRI.

Ques 75:- How can we purchase land from NRI and deduct TDS without having a TAN number?

Ans: In case of land is being purchased from NRI, the buyer needs to deduct TDS and TAN number is mandatory in case of the seller is NRI but not mandatory when a seller is Resident. So, in this case, TDS cannot be deposited without having a TAN number.

Ques 76:- Is TAN required while filing Form 27Q and lower TDS is deducted?

Ans: Form 27Q is applicable when deductee is Non-Resident and in case the payee is non-resident and filing form 27Q then even TDS is deducted at a lower rate, TAN is mandatory requirement to file TDS return and depositing Tax.

Ques 77:- Can NRI sell property in India to another NRI?

Ans: Yes, NRI can sell any residential or commercial property owned by him in India to any resident or non-resident without any restriction but If he has any farmhouse or agriculture property then he needs RBI approval before a sale and also that property can be sold only to Indian residents.

Ques 78: If NRI has a pan card can he sell property with 1% TDS?

Ans: No, TDS is deducted on the basis of residential status and not on the basis of PAN card and 1% TDS is allowed only for Indian residents which are not allowed for Non-residents even if he has PAN Card.

Ques 79: How to apply for a lower deduction certificate under section 197 online?

Ans: For applying lower deduction TDS, the Taxpayer needs to apply Form 13 through online through Traces website. If he is not registered at traces then first need to get himself register at www.tdscpc.gov.in and log in there and file application Form 13.  After that taxpayer needs to submit the application in Form 13 along with supporting documents and sign that through an Electronic verification signature or through digital signature which will then assign to his assessing officer for approval.

Ques 80: What is the letter of authority for NRI for lower TDS?

Ans: Form 13 is everything that is used for getting a lower TDS certificate through which the Assessing officer is authorizing to the deductor to deduct TDS at a lower rate on the basis of such authority.

Ques 81:- Should NRI needs to get a TAN no. Before selling property in India?

Ans: No, TAN is required for deducting TDS and if NRI is selling property in India then the buyer needs to deduct TDS and the buyer only needs TAN no. not the NRI.

Ques 82: Is there any permission from RBI is needed for repatriation of sale proceeds of property of NRI sold in India?

Ans: In the event of sale of immovable property by NRI, repatriation of sale proceeds shall be allowed only if the following conditions are satisfied:-

  1. NRI has acquired that immovable property by complying with all the provisions of the Foreign exchange Management Act.
  2. The amount repatriated must not exceed the amount received through normal banking channels or funds lying in the Foreign Currency Non-Resident (FCNR) account for the acquisition of such immovable property
  3. In the case of residential property, the repatriation is not allowed for more than two such properties.

Ques 83: What are the FEMA guidelines on the purchase of immovable property by NRI?

Ans: NRI buying property in India must know about the channels through which purchase price should be paid. As per RBI guidelines, payment of purchase price for buying any immovable property in India must be made out of

-funds received in India through normal banking channels by way of inward remittance from any place outside India, OR

– funds held in any Non- Resident account maintained as per the provisions and guidelines of RBI.

No payment either made by traveler’s cheque or by currency notes of any foreign country or any mode other than those specifically permitted by the Reserve Bank.

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