I am purchasing property from the joint owner - NRI( Husband & wife). the seller got the lower tds exemption certificate from the IT department. Its a system generated 10 digit alpha numeric certificate. I & my wife are buying the property jointly. the property is ( of say) 400 Rs the two certificates are obtained from the IT department 1) One of Rs 200 for me @5.5%TDS issued with my TAN and the seller-Husband PAN 2) Second of Rs 200 for my wife @5.5%TDS issued with my wife TAN and the seller-Husband PAN the seller have joint bank account. The wife-husband are the joint owner of the property. when we pay the TDS , then we are not deducting any amount from the wifes share as her name is not featuring in the TDS exemption certificate. How to handle this ? shall I continue and pay the TDS as per the certificate or ask him to get it rectified so that there are 4 certificate. one of each pair of Rs 100 each
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Then from the share of wife the TDS has to be deducted and deposited with department if there is no exemption certificates in her name as there is capital gain to both the independent tax payers the seller husband and wife so there share should be treated individually.
So either he gets it retified and get in name of wife for 200 or he gets benifit on only his share that is 200 from any of you either your wife or your as his share is limited.
In case NRI seller produce Lower Tax Deduction Certificate under section 195 the applicable TDS rate will be as per certificate issued by the income tax department
2)TDS is deducted in proportion of ownership in property of both buyers / sellers. A separate challan/s are required for each transaction. For example, in case of 2 buyers and 2 sellers, For TDS filing no of challans for each installment / lump sum payment is 4.
3) ask seller to get certificate rectified from income tax department
Dear Sir,
Sorry to say that the matter pertains to Income Tax and you may please take second opinion of Chartered Accountant apart from opinion of advocate practicing on tax side.
Secondly the following information benefits you, if you mind to purchase the property in the exclusive name of your wife.
Benefits of buying a property in the wife’s name!
Benefits pertaining to tax
Tax is one of the main issues that clamour the minds of home buyers. If the wife is a
taxpayer, she can enjoy additional deduction of up to 1.5 lakhs of rupees every year towards the payment of home loan. When both the husband and wife are working, then both can claim the tax benefits individually. The amount of tax benefit is proportionate to the share of ownership both of them enjoy.
Tax slabs for woman exempt larger amount of income when the earner is a female.
Stamp Duty burden becomes less
UP, Delhi, Rajasthan are some of the states that have extended relaxation in stamp duty
amount to female property buyers. While the male buyer is liable to pay 6%, and the couple 5%, the female buyers are given the opportunity to pay stamp duty at 4%. Thus, buying property in the wife’s name does help you save on the stamp duty amount. Jharkhand is the latest to announce unprecedented benefit to female buyers; here, it is proposed that she will be liable to pay only Re.1 as stamp duty.
Home loan at cheaper rate
Home buyers are always on a look out for ways to reduce expenditure on loans. Home buying is seen as a pretext to save tax and helps build wealth, in addition to having a place to call your own. Our taxation system is designed in a manner to promote investments in realty and infrastructure. In addition to encourage more moves from female property buyers, they are offered home loans at cheaper rates than males. A female buyer can get home loan at rate 0.05% cheaper than the male buyers. Experts report that a female buyer can get up to 30 lakhs of loan from State Bank of India at 8.50% as against a male who is sanctioned loan at 8.55% interest rate. The difference may look very small in terms of percentage, but makes a great impact on expenses if the loan availed is of a very large amount.
These are a few of the monetary benefits that a person can enjoy by buying the property in
your name. If these fail to encourage you to take a call, then the facts that you can win her in style by booking property in her name may prompt you to do so. The idea of being labeled as promoter of women empowering soul and the one who loves and cares for the wife deeply is also exciting to go for the property in the name of the wife.
Dear Cleint,
Based on the certificate of lower deduction issued by the Income Tax Officer, the seller can deduct lower taxes.
As the property is in joint ownership than it suppose to be 50 % of each.
Issued certificate has to be in the name of Wife other wise LOW TDS will deduct from his share only that is from 50 % of total sale consideration, rest of his wife holding, TDS will deduct on same rate i.e. 20% + cess.
Seller is at loss not you, Ask him to get it rectified or you will deduct TDS on above given terms.
Whenever you are in doubt about such things, you may shift to the main law and rule of exemption on this so that you can avoid paying it out from your pocket at a later date when the vendors would have disappeared after selling this property, being NRIs.
The vendors can claim refund from the IT department after filing their returns in this regard even if you have deducted an excess amount now.
