My father holds a GPA. We have sold the property and there is no capital gain. In fact there is a long term capital loss. We have received the payment after deducting TDS at the rate of 1% in the GPA holder account ( my fathers account). Please advice the correct course of action. Regards, Rajan
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Power of Attorney doesn't makes a rightful owner so your father cannot receive money against the sell of the property.
However if the transaction has happened and your father has received the money then you need to show that sell in the ITR wherein you may get a query that how can you sell off a property you never own.
And there you can show your capital loss and take refund of 1% money deducted from the consideration price.
The property you sold was at a loss. That means that you are not liable to pay any tax to the government. When you fike ITR then you should demand a refund based upon the loss.
Section 194IA prescribes that a buyer of immovable property that costs more than Rs.50 lakhs is required to deduct TDS on property while paying the seller. The rate of TDS on property for this deduction is 1%
If the TDS has been made on the GPA's account, then he should recover that amount from the Principal, and the Principal can claim refund of the same while filing his ITR.
When the tax deducted does not match your actual tax payable, you can calculate your income and taxes, file an income tax return (ITR) and claim a refund
In case you do not have taxable income, you can apply for a lower or NIL TDS certificate from your jurisdictional Income Tax Officer in Form 13 as per Section 197.
When you don’t have a taxable income, please submit a declaration in Form 15G before the end of FY to your bank to notify them that you don’t have a taxable income.
Usually, if you have filed your ITR on time, it takes approximately 3 to 6 months for the refund to be credited in your bank account.
Dear sir/ma'am,
To correct the course of your long term capital loss, you can consider either of the following:
1. Setting Off Losses - Setting off losses means adjusting current-year losses against current-year income. Only capital losses can be deducted against capital gains income. These cannot be deducted from other sources of income.
2. Carry Forward for capital losses - If you do not have enough income to offset incurred losses, you may carry the losses forward to future years to offset against future income.
Thank you
- As per Section 194IA of Income Tax Act, A buyer has to deduct tax at the rate of 1% of the sale consideration, if the value of the transaction is Rs 50 lakhs or more.
- Further , this section covers residential property, commercial property, as well as land , and transactions pertaining to the purchase of agricultural land, are not covered under this provision.
- Hence, the buyer has to deduct TDS at 1% of the total sale consideration , and not seller.
- Further, No TDS is required to be deducted if sale consideration is less than Rs 50 lakhs
- And further, if the payment is made by installments, then TDS has to be deducted on each installment paid.
