Comprehensive Online Application for Lower or NIL TDS Services

Our Service will include

– Computation of Lower TDS rate or NIL TDS
– Online Form 13 Application and follow up with IT Dept
– Temporary Tan Application and Surrender post Certificate issue
– Filing of Required documents and handling query
– Issuance of Lower TDS/NIL TDS Certificate on NRI sale of property and online verification

Specialized Compliance and Advisory for NRI Property Sales

Selling immovable property in India as a Non-Resident Indian (NRI) is subject to Tax Deducted at Source (TDS) at a mandatory rate of 20% (plus surcharge and cess) on the sale consideration. This high rate is often far greater than the actual tax liability.

The Finance Bill (No. 2), 2024 (now the Finance (No. 2) Act, 2024) introduced significant and complex changes to the Capital Gains Tax (CGT) regime in India, with the key change being a reduction in the standard Long-Term Capital Gains (LTCG) rate for most assets, but with the simultaneous removal of the indexation benefit.

The changes, which are generally effective from July 23, 2024, are part of a move towards simplification and rationalization of the tax structure.

Context of the Rate Reduction

The primary "reduction" in rate is for Long-Term Capital Gains on non-specified assets (e.g., gold, unlisted securities, and especially immovable property for certain taxpayers).

The rate was reduced from 20% to 12.5%. However, because the benefit of indexation (adjusting the original cost for inflation) was removed, the overall tax liability may increase for assets held for a very long period, despite the lower rate.

We provide specialized professional consultancy to minimize this immediate tax burden through the statutory mechanism of obtaining a Lower Deduction Certificate (LDC), also known as Form 13, under Section 197 of the Income Tax Act. The best idea to apply for Low or NIL TDS certificate U/s 197 of Income Tax Act as soon as you find a prospective buyer and properly sale value is fixed.

Apart from that here is the twist An NRI can apply for a lower tax deduction. i.e. for deducing his TDS only on capital gains. The TDS (U/s 195) will be calculated only on capital gain rather than on complete sale value, which in fact can be 1% or 2 % and in some case even No TDS may be required if there is no actual gain as per calculations. Bonus, you can save this TDS as well as by reinvesting re-invest the capital gain in another property within two years or investing in tax-free bonds (within six months). And they need to apply for a lower TDS certificate under section 195 of income tax. He needs to apply to ask a CA to file for 15CA &15CB and can remit the money to his country or can keep this money in his NRO account, with a maximum limit of $1 million.

We at AKT associate can help you in the end to end compliance, to make this daunting process to an easy smooth well-coordinated effort. We have a team of best CA/CS to advice you on your financial/taxation matters .any services Tax benefits, and tax planning, Moreover, you can do all this process online from anywhere in the world. Well said, ” A stitch in time, saves nine”. You can count on our Expert team In India to carry out your Lower/ No TDS assignment with ease so that you can focus on what matters more to you.

Consequences of Incorrect or Non-Deduction of TDS

In property transactions involving an NRI seller, the responsibility of deducting and depositing TDS lies entirely with the buyer. Sometimes, due to lack of awareness, the buyer may deduct TDS at resident rates or may fail to deduct TDS altogether. Such mistakes can lead to serious financial and procedural issues.

If TDS is not deducted or deposited as per the applicable NRI tax rates or as mentioned in a valid NIL or lower TDS certificate issued by the Income Tax Department, the buyer may be treated as an assessee in default. In such cases, the buyer may be required to pay the shortfall amount along with applicable interest as per income tax provisions. Additionally, incorrect or non-deduction of TDS can create problems for the NRI seller. Banks may not allow repatriation of sale proceeds to an overseas bank account or NRE account unless proper TDS compliance is completed. This can delay or restrict the transfer of funds outside India.

To avoid future complications, it is important for buyers to ensure correct TDS deduction and timely compliance in NRI property transactions.

Our Comprehensive Professional Assistance Includes:

1. Tax Liability Assessment: Detailed calculation of the actual long-term or short-term capital gains tax liability on the property sale.

2. Documentation & Evidence Management: Expert collation and preparation of all required documents, including historical cost records, foreign currency conversion proofs, bank statements, and sale agreements.

3. Form 13 Application Drafting and Filing: Professional drafting and online submission of the Form 13 application, ensuring all technical fields and legal arguments align with Income Tax rules.

4. Representation & Liaison: Acting as your authorized representative (Chartered Accountants governed by the ICAI) to respond to queries, submit clarifications, and liaise with the Income Tax Department's TDS CPC until the Lower Deduction Certificate is issued.

5. Post-Sale Compliance: Guidance on subsequent filing of the Annual Income Tax Return (ITR) to finalize your tax position and complete all remaining compliance obligations.