FAQ Capital Gain

Q-What Can Be Done to Reduce TDS on NRI's Property Sale?
I am a NRI and I bought a apartment in Mumbai in Feb 2006 for Rs27 lakhs. Now I am planning to sell it for 49.25lakhs. What will be my capital gains tax be? The buyer told me that the capital gains tax will be deducted at source(TDS). How is TDS calculated in this scenario?Is there a way to avoid/minimize capital gains tax?
Had you been Resident in India , there would not have any question of tax at source. But for Non Residents, there is a provision u/s 195 of the I T Act which compels payers to deduct the tax on the total amount paid by him to the Non Resident. It means that under law, the purchaser of your property shall have to deduct the tax on Rs 49.25 lakhs and Not the amount of capital gains you make.
property's purchaser who is responsible for paying Rs 49.25 lacs to you can apply before A.O stating that whole of Rs 49.25 shall not become taxable under income and therefore he be allowed to deduct the tax on the gain amount only. You ask C.A. to work in that regard. You request the purchaser to apply before the A.O and ask your C.A to assist in that regard.


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