TDS has to be deducted as daughter is NRI and has share in property
refuse to agree to seller demands of no deduction of TDS
Buying property in bangalore from NRI
Hi, I intend to buy the owner share e-katha BDA approved plot developed by a developer. The plot is owned by mother and daughter. The daughter has given GPA to her younger brother to sell the property since she stays in the USA.The mother and the developer got into a JDA to develop the property and the developer has sold out his share. Now I am being told that I have to pay TDS for the value of share owned by the daughter, or have the mother execute the sale deed and the daughter come in as a consenting witness, a new power of attorney be executed for this with the brother for him to sign off on her behalf. But the seller is insisting that its not required and the entire money can be paid with no deduction of tds to the mother alone and the draft agreement shared still listed both mother and daughter as seller. And the same arrangement has been executed for rest of the plots in the property as well. I have already paid a token advance so trying to find a way to close this but still protecting my interests. Please advice best way forward.
Asked 4 years ago in Property Law
Religion: Hindu
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14 Answers
You need to pay the amount deducting tds for legal sale deed otherwise it will be black transaction
I checked with SBI who is processing loan, they said you can pay the entire amount to Mother, and get a NOC from daughter. Pay TDS of 1% since mother is residing in India. Is this arrangement ok ?
Asked 4 years ago
Daughter has 50 per cent share in property
since she is NRI you have to deduct TDS at 22 per cent for her share in property
I don’t agree with SBI that you can pay entire amount to mother
consult a local CA
1. If the daughter who stays in USA can execute a registered Release/Relinquishment Deed for the property in favour of her mother by appointing either her mother or brother through POA, who will execute the deed on her behalf in Bengaluru.
2. After following the above procedure, you can pay TDS of 1% only as per section 194 1A of I.T.Act as the mother is residing in India.
The developer or the builder or the seller has fraudulently sold the property by not mentioning that the co-sharer is a NRI, hence they managed to avoid getting the TDS from the sale consideration amount.
The daughter is also a shareholder hence she cannot turn to be a consenting witness.
She has to execute the registered sale deed jointly long with her mother either by herself or through her power of attorney agent.
As per law the sale consideration to the share of the NRI should be paid only after deducting at source the applicable tax or else the buyer would be held liable for penalty besides criminal action against him
The SBI is incorrect in this regard.
One of the sellers is a NRI.
Hence TDS to be made against her share in the sale consideration amount.
Arrangement ok but tds may be more I guess
does things change if the property about 4 acres was originally bought by the mother in 1975 and later subsequent to development of the layout some of the plots was given to the daughter and other relatives -- As per documents its mentioned that the mentioned plot (1650 sqft) is allocated to both mother and daughter in 2013. At least there is no trace of a sale deed executed by the mother in favour of the daughter.
Asked 4 years ago
If transfer has been executed by mother in favour of daughter and other relatives then there should be sale deed or gift deed on record
without any transfer documents name of daughter could not have been added in revenue records
Nothing changes. IT requirements will be the same for TDS
If there is no documentary proof to prove the title of the seller who is selling the property to you, then you cannot buy the property by a sale deed executed by the person whose title is defective or having no clear and marketable title to sell the property in favor of the prospective purchaser.
Have you obtained a legal opinion from a local lawyer conversant with the law and the procedures and whether recommended to purchase the property, if not you may approach a local lawyer and obtain a proper legal pinion before venturing into this proposed purchase of the property
What should be considered the documentary proof that the seller is NRI ?
Asked 4 years ago
Copy of passport ,income tax returns would reflect whether person is NRI
The seller should have a registered sale deed to prove his title to the property, in the absence of which it is not advisable to go ahead with the proposed purchase of the property.
His stay as per the pasport for more than 182 days in a financial year outside india will make him NRI. Even other documents related to NRI bank accounts also prove the same
Passport showing the VISA entry and/or OCI Card.