I have an apartment and I am an NRI US Citizen. The payments to apartment and all dues to builder are paid in full and am waiting for registration. I have found a buyer for the apartment and have agreed on a price. The builder is ok with it. Question 1) what would the TDS percentage be? I am an NRI 2) the buyer doesn't have a TAN yet - should I proceed with it our withdraw for a later date when TAN is available?
Ask a question and receive multiple answers in one hour.
Lawyers are available now to answer your questions.
3) If I do not make the sale then I will have to register the apartment; the apartment happens to be in my wife's name. Will a power of attorney in US (authorizing one US citizen to represent another US citizen in matters of this apartment - be it registration or sale ) be valid in India, given both India and US are signatories to the Apostille Convention.
Provisions for Non Resident Indian :- If payment is made to a Non-Resident then section 194-IA will not be applicable. Rather section 195 will be attracted and TDS is required to be deducted @ 20% + EC & SHEC on the sale consideration. Surcharge @ 10% will be applicable if amount paid exceeds Rs 1 crore.
2) Buyer will deposit TDS with Income Tax Department. TDS is applicable even if value of property is less than 50 lakhs.
POA dully attested before Indian consulate by your wife would be valid in India for registration of property
Thank you for your quick answer. The buyer currently doesn't have the TAN. Would it be advisable to wait until the TAN is there or is it safe to proceed with the sale with a signed affidavit from the buyer that the TDS will be deposited upon receipt of TAN?
buyer should have TAN no for deduction of TDS
2) in case buyer does not have TAN he should apply for same before deduction of TDS
3) wait until buyer has TAN
Please wait until you get the TAN of the buyer
When an NRI sells property, the buyer is liable to deduct TDS @ 20%. In case the property has been sold before 2 years(reduced from the date of purchase) a TDS of 30% shall be applicable.
To curb evasion of tax on property sales, the income tax department has made it mandatory for buyers of property to deduct TDS from payments made to the seller.
If there are more than one seller, TDS must be deducted on payment made to each one of them. PAN of the seller is mandatory, otherwise TDS is deducted @ 20%. PAN of the buyer is also mandatory. Usually all TDS deductors have to obtain a TAN number, however, for buyer of property, TAN is not required.
A Power of Attorney, especially, when concerning real estate transactions, is an important document. Powers of Attorney may relate to large monetary dealings sometimes and extreme care and thought should go into preparing a power of attorney document.
The person giving and the person receiving the Power of Attorney must be competent. Minors and other persons disqualified by law cannot grant a Power of Attorney. o POA should be given for legal purposes. o POA must be duly stamped, notarized or registered or adjudicated, as the case may be. o Powers of Attorney executed abroad have to be certified by an Indian Consulate Officer. o Registration of POA is compulsory in cases of ‘Special Power of Attorney’ that authorizes the holder of the Power of Attorney to present for registration, a document executed by the person giving the POA. o Powers of Attorney given abroad have to be authenticated by an Indian Consulate official or a Notary. It should be stamped or adjudicated, within three months after receipt in India.
The POA holder will need to provide his identity and address proof along with the witness at the sub-registrar office
The buyer currently doesn't have the TAN. Would it be advisable to wait until the TAN is there or is it safe to proceed with the sale with a signed affidavit from the buyer that the TDS will be deposited upon receipt of TAN?
The buyer has to deduct the tax at source when buying the immovable property from a NRI.
PAN of the buyer is also mandatory. Usually all TDS deductors have to obtain a TAN number, however, for buyer of property, TAN is not required.
1. If the seller is NRI then TDS at the rate of 20.66% is to be deducted under Section 195 of IT Act. The value of property is immaterial to this end.
2. TAN is not required. What is required is that PAN number of buyer and seller must be mentioned.
3. TDS must be deposited with the government within seven days from the end of the month in which it is deducted.
1. The GPA cannot be executed in favour of an individual who is not a citizen of India.
2. Penalties apply under the IT Act for non-deduction of TDS or delayed deductions. Penalty for late deduction or late payment of TDS (under section 201): 1% interest is charged for delay of every month due to late deduction of TDS from the date it was deductible to the date TDS is actually deducted. 1.5% penalty is applicable for every month for late payment of TDS deducted, from the date TDS was deducted till the actual date of payment.