#tds on immovable property for nri

[cloudmuneem]

Understanding TDS on Property Purchase: A Comprehensive Guide

Purchasing property is a significant financial decision, often involving a range of legal and tax obligations. One of the critical aspects of property transactions in India is Tax Deducted at Source (TDS), a tax mechanism implemented to ensure proper tax collection at the time of purchase. Understanding TDS on property purchases is crucial for compliance and for avoiding future legal complications. This guide provides a comprehensive overview of TDS on property transactions, including eligibility, rates, payment procedures, and the implications of non-compliance.

What is TDS on Property Purchase?

In India, TDS on property purchase refers to the tax that buyers must deduct from the amount paid to the seller when purchasing an immovable property (land, building, or part of a building) that costs more than INR 50 lakh. This requirement was introduced under Section 194-IA of the Income Tax Act, 1961, with the aim of regulating property transactions and ensuring that sellers report their earnings accurately.

Who is Liable to Deduct TDS?

The responsibility to deduct TDS lies solely with the buyer, not the seller. Whether the buyer is a resident or non-resident, and regardless of whether they are purchasing the property for personal use or as an investment, a TDS deduction applies if the property value exceeds INR 50 lakh.

TDS Rate on Property Purchase

The standard TDS rate on property purchases is 1% of the total property value if the seller is an Indian resident. However, if the seller is a non-resident Indian (NRI), the TDS rate increases to 20% due to the additional capital gains tax applicable for NRIs. In the case of NRIs, the TDS is deducted from the sale proceeds after accounting for the capital gains tax, which depends on the period the seller held the property.

How to Calculate TDS on Property Purchase

To calculate TDS, consider the total sale price agreed upon with the seller. For example, if the property value is INR 70 lakh, the buyer should deduct 1% of INR 70 lakh (i.e., INR 70,000) and pay the remaining INR 69,30,000 to the seller. If the seller is an NRI, the buyer needs to deduct TDS at 20%, adjusting for any surcharge or applicable cess.

Procedure for Deducting and Paying TDS

Here's a step-by-step breakdown of the procedure for deducting and paying TDS:

Obtain the Seller's PAN: Ensure that the seller's PAN is available, as it is necessary for TDS payments and form filing.

Calculate TDS Amount: Calculate 1% of the total property value for Indian residents or 20% for NRI sellers.

Fill out Form 26QB: Form 26QB is the official form for TDS on property purchases, accessible via the TIN-NSDL website.

Make Payment: You can pay the TDS online or at an authorized bank branch using the challan generated from Form 26QB.

Issue TDS Certificate (Form 16B): After payment, download Form 16B, a TDS certificate, from the TRACES website and issue it to the seller within 15 days of the TDS payment date.

Timeline for TDS Payment and Filing:

Buyers must pay the TDS within 30 days of the end of the month in which the deduction was made. Failure to comply with this timeline can result in penalties and interest charges.

TDS on Property Purchase from NRIs:

For property purchases involving NRI sellers, the TDS process is slightly different due to the additional capital gains tax implications. Buyers need to calculate the tax based on the sale consideration after adjusting for any applicable deductions. It is advisable to consult a tax professional in such cases to avoid errors and ensure compliance with tax regulations.

Penalties for Non-Compliance:

Non-compliance with TDS requirements on property purchases can lead to penalties, such as interest charges and fines. If the buyer fails to deduct TDS, they may be liable for a penalty equal to the TDS amount. Furthermore, delayed payments may incur interest charges at a rate of 1.5% per month until the full payment is made.

Conclusion

Understanding and complying with TDS requirements on property purchases is essential for every buyer in India. It not only ensures adherence to tax laws but also provides a seamless transaction experience. By being well-informed about the eligibility, calculation, payment procedures, and penalties associated with TDS, buyers can avoid legal complications and potential financial setbacks. TDS compliance is a straightforward process, and following the correct steps ensures that property transactions are completed smoothly and transparently, allowing both buyers and sellers to benefit fully from the transaction

For expert assistance and guidance on TDS and property transactions, contact Cloud Muneem today!

[ushmaassociates]

TDS in sale of Immovable property by an NRI

[indian-pan-card-usa]

Apply for new pan card in New York

A Permanent Account Number (PAN) card is an essential document for various financial transactions and is required for all Indian citizens and entities conducting business in India. If you’re an Indian residing in New York or an Indian-origin individual needing a PAN card, the process to apply for one has been streamlined and can be completed from abroad. Here’s a comprehensive guide on how to apply for a new PAN card in New York.

What is a PAN Card?

A PAN card is a unique 10-character alphanumeric identifier issued to all tax-paying entities in India. These entities include individuals, companies, partnerships, trusts, and foreign nationals conducting business in India. The PAN is unique to each entity and is valid for a lifetime, regardless of any changes in address or employment.

Importance of a PAN Card

Tax Identification and Compliance:

Income Tax Returns: PAN is essential for filing income tax returns. It ensures that the tax-related activities of individuals and entities are tracked.

TDS/TCS: It helps in the tracking of tax deducted at source (TDS) and tax collected at source (TCS).

2. Financial Transactions:

Banking: Required for opening bank accounts, applying for loans, and conducting transactions above a certain limit.

Investments: Necessary for investments in securities, mutual funds, and fixed deposits exceeding a specified amount.

Property: Essential for purchasing or selling immovable property above a certain value.

3. Identity Proof:

PAN card is widely accepted as valid proof of identity across various sectors, including financial institutions, government services, and private organizations.

4. Prevention of Tax Evasion:

The PAN system links all financial transactions of an individual or entity, thereby reducing the chances of tax evasion and ensuring transparency.

Features of a PAN Card

If you want to apply for new pan card so you can contact us +1 (416) 996–1341 or pancardservice253@gmail.com for apply new pan card in new york.

Unique Identification Number:

Each PAN card has a unique 10-character alphanumeric code that follows a specific format, ensuring no two PAN cards are identical.

2. Validity:

The PAN card remains valid for a lifetime. It is not affected by changes in personal information such as address or employment status.

3. Universal Acceptance:

Recognized across India as a valid proof of identity and essential for various financial and legal transactions.

4. Structure of PAN:

The PAN number consists of 10 characters, where the first five characters are letters, followed by four numerals, and the last character is a letter. For example, ABCDE1234F.

The fourth character signifies the type of PAN holder (individual, company, trust, etc.).

5. Details on the Card:

The PAN card contains the cardholder’s name, father’s name, date of birth, signature, and a photograph. For non-individual entities, it includes the entity’s name and date of incorporation.

Applying for a New PAN Card

Who Can Apply?

Individuals: Indian citizens, NRIs, PIOs, and OCIs.

Entities: Companies, firms, HUFs, trusts, and foreign nationals/entities conducting business in India.

Conclusion

Apply for a new PAN card in New York is a straightforward process if you follow the correct steps and provide the necessary documentation. Whether you’re an NRI or an individual of Indian origin, having a PAN card is crucial for managing your financial affairs in India. By following this guide, you can ensure a hassle-free application experience and receive your PAN card without any complications.

Contact Us- Phone- +1 (416) 996–1341 Email Us- pancardservice253@gmail.com

[ecopackindia]

NRI - TDS on the sale of Property in India and Repatriation

TDS – NRI-182 days- When there is a purchase of immovable property, the buyer needs to deduct tax (TDS) from the Sale value, pay the balance amount to the Seller, and pay the TDS amount to the Government. As per the Indian Income Tax Act, when a resident purchases any property from a Non-Resident, he has to deduct tax and pay the balance amount to the Nonresident (Seller). 1. Applicable TDS…

[shiv100]

TDS (Tax Deducted at Source)

TDS (Tax Deducted at Source): What is it?

TDS (Tax Deducted at Source) is the term used to describe when income tax is subtracted from payments that are specifically covered by the income tax, such as rent, professional fees, commission, salary, interest, etc. When receiving income, an individual is required to pay income tax. According to a government provision, income tax will be withheld from your payments ahead of time. “tds on sale of property” Your take-home pay is the net amount remaining after source-reduced taxes.

TDS on property sold in accordance with section 194-IA

Only properties valued at more than Rs 50 lakhs are subject to TDS when they are sold. A buyer must legally pay 1% of the transaction cost as TDS on the sale, according to Section 194-IA (Income Tax Act). 

The buyer must subtract 1% TDS from the value at stamp paper or the actual price, whichever is higher, in accordance with the new budget 2022 rule.

On real estate sales, who deducts TDS?

Any time an immovable property is purchased, the buyer is required to deduct the TDS. It's a tax taken out of the original system to stop unethical behavior. When buying property of a certain type, the buyer is required to deduct 1% TDS from the total amount paid and deposit the remaining funds into the Indian government's account. Form 26AS or a TDS certificate from the buyer may be used to credit the seller for the amount deducted. “tds on purchase of property”

Should any of the parties to the agreement neglect to fulfill their obligations, there will be a penalty.

TDS on real estate sales in 2023

kinds of properties covered by TDS

private land

Business Real Estate

Land Note: The TDS Act does not apply to agricultural land.

How is the TDS deducted and paid for?

A buyer is required to finish the process of remitting TDS into the Government of India's account within the first thirty days following the end of the month of the conveyance deed. In order to pay TDS, a Form-cum-challan no. 26QB is needed. If there are multiple buyers or sellers for the property, each must complete a separate Form 26QB with all the necessary information.

TDS on an NRI's property sale

For long-term capital gains—property bought and sold after two years—the TDS rate is 20%. The TDS rate would fall below the NRI tax bracket for short-term capital gains, which are defined as property sales that occur within two years of purchase.

TDS on joint owners' property sales

TDS would not be applicable if a buyer's share of the property is less than Rs. 50 lakh and there are joint buyers, per section 194 1A and the Delhi Bench income tax tribunal's decision. 

How can I get my TDS back when I sell my property?

After TDS is deducted and paid along with the income, a buyer gives Form 16B to the seller of the real estate. 

Extensive data needed to cover TDS

Information about the seller and buyer needed to pay TDS

Information required for Form 26QB filing includes 

Name, address, PAN, phone number, email address, and full property address

Date of the agreement Total amount of money paid

Date of payment; no TDS deduction

On immovable property, there is no such TDS provision.

When is the TDS expected to be deposited?

For instance, a TDS that was withheld in March needs to be transferred to the Indian government's account by April 7. This implies that TDS must be deposited by the seventh of the following month after a buyer deducts the tax.

Consequences of not paying TDS

Penalty for failing to pay TDS within the legally stipulated timeframe: the buyer faces fines in the form of interest or a hard seven-year jail sentence. “tds on purchase of property section”

How can I obtain Form 16 by paying TDS using Challan 26QB?

Complete Form 26QB with all necessary information, including the buyer's and seller's PAN and property details.

Maximum paid/credited amount and tax information

Seller and buyer's contact information

Buyers should keep in mind the seller's residential status factors.

Don't enter a PAN number or any other incorrect information.

Check PAN Specifics

The Income Tax Department would be involved in any correction. Things the Seller should keep in mind

Verification of Deposit for your Annual Tax Statement on Form 26AS.

[cadeveshthakur]

TDS on sale of Property| Payments to builder in Installments| Pay TDS on property purchase

Dear Viewers, In this video, we have discussed the TDS provisions related to the sale of Property in the case of residents and non-residents as per section 194-IA of the Income-tax Act 1961. As per section 194-IA purchaser of the land or building has to file online form 26QB statement cum challan whereby the buyer is required to deduct TDS @1%. The viewer can find detailed information regarding the filing of online Form 26QB in case of the purchase of property above the threshold limit of Rs. 50 Lakh during the relevant financial year where the seller is a Resident and payment of property is paid in Instalments. In this video, we have considered a case of Late payment of TDS, Interest u/s 234E, and payments made in Instalments. Section 194-IA deals with TDS on the sale of property in case of a resident, TDS on the sale of property by NRI, TDS on the purchase of property from NRI, TDS on the sale of immovable property, form 16b, form 26qb, how to claim TDS on sale of property, how to file online form 26QB. In our previous video, we considered the Lumpsum payment for filing Form 26QB. The viewer can reach out to us at cadeveshthakur@gmail.com We would love to have your feedback. Please spare a minute to post a review of our profile. https://g.page/r/Cd6ZCkCWVF2LEAI/review

#taxation #tax #taxes #accounting #accountant #taxseason #incometax #business #finance #taxrefund #taxplanning #gst #taxreturn #taxprofessional #taxpreparer #taxtips #bookkeeping #taxconsultant #taxpreparation #charteredaccountant #irs #audit #taxtime #taxhelp #smallbusiness #incometaxreturn #india #taxprep #accountingservices #money

[cafornri]

Chartered Accountant for Non Resident Indian

A Portal dedicated to provide exclusive professional services to Non Resident Indians (NRI) for NRI Taxation and FEMA Compliance since 2012. We understand the challenges of Non Resident Indians of complying with the Taxation and FEMA woes. Whether it is filing Indian Income Tax Return, Getting back the TDS Refund, Repatriation of Funds, Procedures for Buying and Selling an Immovable Property or Addressing the Income Tax Scrutiny Letters received. To address the challenge faced by you, that s where we can help you out. The sole purpose of our firm is to serve as a trusted advisor. We do it this by helping you cut through the red tape, viewing the big picture and understanding the options. This makes your financial and compliance peace move forward and grow. CAforNRI.com, this website is dedicated to serving Non Resident Indians (NRIs) with respect to NRI Taxation and FEMA Compliance. This website is incorporated by Zenify Consultancy Services to have a click away assistance to the clients looking for professional services in various countries including US, UK, UAE & Other Gulf Nations, Canada, Singapore and Australia to name a few. Zenify Consultancy Services incorporated by Founder CA Ajay R. Vaswani is a leading Indian Consultany firm, led by skilled and experienced team of professionals for near a decade by now. Zenify Consultancy Services is exclusive firm to provide services with matters related only to Non Resident Indians with dedicated and most knowledgeable team having read related applicable laws in depth and having professional rich on hand experience.

[sharmaaanya]

According to the TDS on Immovable Property & Lower Deduction Certificate, the buyer of the property must deduct TDS on the whole amount. If the property is held by two sellers, each must submit Form 13 to get the certificate. Contact Ushma Associates to help you deal with such a situation.

[legalntax]

The Concept of Low Deduction Certificates

Who doesn't like to pay tax at low rate, some people think that it is a far-sighted idea but in reality common people can take advantage of low rate of tax. It sounds very complicated but its process is easy but to understand the law and key points you have to take the help of universal teacher "Books" or you can consult your financial advisor on the subject.

Let’s understand ‘what is the term LDC is’ and ‘how this system works for the general welfare’.

Lower Deduction Certificate section 197 of TDS is a hidden gem section of TDS. So many benefits are affiliated with this term, for example, A company who are not PE in India, NRI individual who sale Indian Property and Assessee who going through low N/P or losses. The assessee can avail the Low deduction Tax rate by going through a simple procedure by filing Form 13 to AO.

The deductee can apply for a certificate only for the purpose of receiving the following payments: -Section 192: Salary

Section 193: Interest on securities

Section 194: Dividends

Section 194A: Interest other than interest on securities

Section 194C: Contract charges

Section 194D: Insurance commission

Section 194G: Commission on sale of lottery tickets

Section 194H: Commission or brokerage

Section 194I: Rent on plant & machinery, building, etc.

Section 194J: Professional charges

Section 194LA: Compensation on acquisition of immovable property

Section 194LBB: Income from units of investment funds

Section 194LBC: Income from investment in securitization trust

Section 194M: Payment of certain sums by individuals / HUFs

Section 195: Certain payments to non-residents

The payee is not a company or firm

The payee has duly furnished a statement in Form 15G or Form 15H, declaring that the total income will not exceed the maximum amount not chargeable to tax.

The certificate cannot be applied for if all the following conditions are satisfied: -

Section 192A: Payment of Accumulated Balance Due to an employee

Section 193: Interest on Securities

Section 194A: Dividends

Section 194D: Insurance commission

Section 194DA: Payment under Life Insurance policy

Section 194I: Rent on plant & machinery, building etc

Procedure for Filing Form 13 An application for Nil/ Lower deduction of TDS under Section 197 is required to be made by the taxpayer to the income tax officer in Form 13. Various details are required to be furnished by the taxpayer in this Form 13, some of which include:-

Name and PAN No.

Details regarding the purpose for which the payment is being received

Details of income of the last 3 years and the projected current year’s income

Details of payment of tax of the last 3 years

Details of tax deducted/ paid for the current year

Estimated Tax Liability for the current year

Email ID

Mobile Number

[ezybizadviser]

NRI Tax Return Filing

NRI Tax Return 

In FY 2020-21, approx. 5.89 Crore Income Tax Return has been filed in India. This includes both Income tax returns of Residents as well as NRI tax return.

Income tax or direct taxes are the backbone of any country. The government of any country depends on direct tax or income tax collection for meeting the demand of huge population relating to health, infrastructure, education, defence, roads and other needs.

Similarly, income tax collection is major source of revenue for Indian government as well.

Indian government expects the Indian residents and citizens to pay their taxes and file their Income Tax Return on time to the government.

However, this expectation is not only with Indian Residents but also with the Non Resident Indians or NRIs. Accordingly, any person whether Residents or Non Residents have to pay their taxes and file their tax returns in India in case his/her income is more than the minimum threshold prescribed.

NRI Tax Return Filing - Determining Residential Status

NRI Tax return filing depends upon whether the source of income is from India. Taxability of any income of an individual is also dependent upon his residential status. In case of a resident, his income earned whether in India or abroad is taxable in India. In case of a Non Resident, his income earned abroad is not taxable in India. Only his income earned in India is taxable. Similarly, in case of Not Ordinary Resident, only his income earned in India is taxable in India.

In case of following types of income earned in India, normally, Non resident is liable to pay taxes and file his Income tax Return in India provided the income exceeds the basic exemption limit of Rs 2,50,000

a)      Interest on Fixed deposits

b)     Dividend from shares or mutual fund

c)      Capital gains from sale of immovable property

d)     Rental Income

e)      Capital gains from sale of shares or mutual funds

f)       Salary earned in India

Some points relating to NRI Tax Return Filing

·         Like Residents, they also enjoy the slab benefits

·         In case income of NRIs fall under section 115G, they are not liable to pay taxes or file their tax return in India.

·         Like residents who need to deduct TDS in case payment is in excess of prescribed limits, there is no such benefits available for NRIs and in case any payment is made to non-residents who are liable for TDS, TDS is deducted on entire payment without any threshold.

·         Deduction u/s 80C are also available to NRIs just like Residents. However, they cannot cliam tax deductions on Public Provident Fund (PPF), National Saving Certificate (NSC) and any schemes related to senior citizens and so on.

·         NRIs can also claim deduction u/s 80D, 80E, 80U and section 54.

·         Any dividend received from shares or mutual fund is taxable..

·         Earnings from government bonds are non-taxable. Similarly, any income from from Foreign Currency Non-Resident (FCNR) or Non-Resident External (NRE) accounts, are non-taxable.

·         Exemptions under Sections 54, 54EC and 54F are also available to NRIs from capital gains.

Double Taxation

There may be a situation where same income earned by NRIs is taxed in both the countries i.e. country of residence as well as source country. In order to avoid such situation, India has entered into Double Tax Avoidance Agreement or DTAA with several countries.

As per DTAA, such double taxation can be avoided by any of the 2 methods i.e. tax credit method or exemption method..

Under exemption method, tax is payable only in one country and another country exempts it. Under tax credit method, income will be taxed twice. However, credit of such income can be claimed in the resident country.

Documents required for NRI Tax Return Filing

Following documents are required for filing NRI tax return in India:

1.      Copy of PAN card

2.      Copy of Form 16 or 16A or salary slips or contract letter from employer/deductor.

3.      Copy of Form 26AS and AIS

4.       Copy of bank statement of NRE and NRO accounts

5.      Details of all the income earned in India.

6.      Details of capital gain transactions.

[pravasitax]

Checklist for NRIs planning to purchase property from an Indian Resident

An NRI buying property in India is fraught with many legal & taxation formalities. If you are planning to acquire land or buying property in India from an Indian Resident, the following checkpoints need to be kept in mind from the perspective of the Indian Income Tax Law: 

 During purchase of property by NRI in India, an NRI Buyer is responsible to deduct tax if the sale value for transfer of immovable property (other than agricultural land) exceeds INR 50 Lakhs. 

 The tax on purchase of property in India initiates in the form of TDS, for which the rate would be 1% on total sale value if the Resident Seller has furnished his PAN. In the absence of PAN, the TDS rate would be 20%. 

 Tax so deducted needs to be deposited electronically within 30 days from the end of the month of deduction in a challan-cum-return Form - Form 26QB. For filing TDS Form 26QB, there is no requirement to obtain TAN, however PAN is mandatory. The NRI Buyers are also required to register themselves on the TRACES portal with their PAN. 

 NRI is also responsible to generate TDS Certificate (Form 16B) from TRACES portal and furnish the same to the Seller within 15 days from the due date of filing Form 26QB. 

 The Resident Seller can claim the TDS amount as refund by filing a tax return, if the actual capital gain tax payable by the seller is lower than the TDS amount. TDS credit will reflect in the Form 26AS (Annual Tax Statement) of the Resident Seller only if the NRI Buyer successfully completes all the above procedural compliances.

There are separate provisions to be followed in case of an NRI buying property in India from another NRI. Please refer our post on “Checklist for NRIs planning to purchase property from another NRI”. 

[ezybiz-india]

Filing of Form 15CA and 15CB- All you want to know

Remittance of Money Outside India

In case of any remittance of money outside India, the same need to be reported under FEMA Regulations and Income Tax Act.

Normally, AD Bankers permit remittance of money outside India when the following conditions are fulfilled:

The amount to be remitted is from a genuine source

Applicable taxes have been deducted on such     payment

CA certificate in the form of Form 15CB has been     obtained

Remitter has declared in form 15CA that proper taxes     have been paid on such Income

What is Form 15CA?

It is an online declaration made by the person remitting the money wherein he states that he has deducted the tax from any payments made to the Non- Resident.

The purpose of Form 15 CA is to ensure that the tax on such amount is deposited with the Government before making the remittance to the Non Resident.

What is Form 15CB?

It is an online certificate issued by a Practicing Chartered Accountant.

The purpose of Form 15 CB is to ensure that the provisions of the Double Taxation Avoidance Agreement and the Income Tax Act have been complied with while computing tax to be deducted before remitting money outside India.

Requirement of filingof Form 15CA and 15CA

Filing of forms 15CA and 15CB is required in the following situations:

In case of Transfer/Remittance of money from Indian     Bank to Foreign Bank Account

In case of Transfer of money from NRO to NRE Account

In case of Transfer of money from NRO to Foreign Bank     Account

What are the various Components or Parts of Form 15 CA?

Form 15CA has four parts i.e., Part A, B, C, and D.

Part A needs to be filled by the remitter if such remittance is taxable, but the amount is less than INR 5,00,000 in a Financial Year.

Part B needs to be filled by the remitter in case such remittance is taxable and the amount is more than INR 5,00,000 in a Financial Year. Further, an Order/Certificate under Section 195(2)/195 (3)/197 of the Income Tax Act has been obtained from the Assessing Officer for lower/ NIL TDS Deduction.

Part C needs to be filled by the remitter if such remittance is taxable and the amount is more than INR 5,00,000 in a Financial Year. Further, no Order/Certificate under Section 195(2)/195 (3)/197 of the Income Tax Act has been obtained from the Assessing Officer for lower/ NIL TDS Deduction.

Part D needs to be filled by the remitter if such remittance is not taxable as per domestic tax laws.

WHAT ARE THE DETAILS REQUIRED TO BE FILLED IN FORM 15CA and 15CB?

Following Details are required to be filled in form 15CA and 15CB

Form 15CA- Details

Remitter Details-     Name, Address, PAN, TAN of Remitter, Principal Place of Business, Email     id, Phone No., Entity Status

Remittee Details-     Name, Address, PAN, of Remittee, Principal Place of Business, Email id,     Phone No., Entity Status of Remittee,

Signatory Details- Details of the person signing Form 15CA like Name,     Father Name, Designation

Digital Signature-     DSC of Remitter signing the form is required.

Form 15CB- Details

Remitter Details-     Name, Address, PAN of Remitter

Remittee Details-     Name, Address, Country of Remittee

Bank Details- Name     and Address of Bank, Currency, Amount in Foreign Currency and INR, BSR     Code

TDS Details-     TDS Rate under domestic law and DTAA, Amount of TDS in Foreign Currency     and INR, Date of deduction of TDS, etc.

Digital Signature-     DSC of professional signing the form is required.

  What type of remittances are allowed

Normally, the following types of credits are allowed to be remitted by submitting forms 15CA and 15CB.

Salary credited in a bank account can be remitted

Interest on FDR credited in a bank account can be     remitted

The principal portion of FDR credited in a bank account     can be remitted

Proceeds from the sale of immovable property credited     in a bank account can be remitted

Proceeds from the sale of shares, mutual funds credited     in a bank account can be remitted

Rental Income credited in a bank account can be     remitted

Note: In case one Income is taxable and the other Income is exempt, different parts of Form 15CA must be filled, and accordingly, two forms 15CA and 2 Form 15CB, are required. This is also because RBI codes change with the nature of remittance. For example, in remittance of interest on FDR and the Principal portion of FDR, normally, AD Banker asks for two different forms, 15CA and 15CB. NRI Tax Return Filing

Can Form 15CA and Form 15CB uploaded on the portal can be Revised or Cancelled?

There is no scope for revisions of Forms once filed. It can only be revoked or withdrawn.

It may be noted that Form 15CB cannot be withdrawn, if filed, independently.

However, Form 15CA can be withdrawn within seven days from the submission date through the link available on the online account of the assessee on the Income Tax Portal.

Also, if Form 15CA has been filed after mentioning the acknowledgment number of Form 15CB filed, then in such case, if Form 15CA is withdrawn, automatically, Form 15CB will also be withdrawn.

What are the consequences for non-filing of forms 15CA and 15CB?

Non-filing of form 15CA and 15CB would result in a penalty up to Rs 1 lac u/s 271 of the Income Tax Act, 1961. Income Tax E Assessment

IN WHICH CASES SUBMISSIONS OF THE FORMS ARE NOT REQUIRED

In following cases of remittances as specified in Rule 37BB no need to file form 15CA and 15CB

Nature of Payment

1. Indian investment abroad -in equity capital (shares)

2. Indian investment abroad -in debt securities

3. Indian investment abroad-in branches and wholly owned  subsidiaries

4. Indian investment abroad -in subsidiaries and associates

5. Indian investment abroad -in real estate

6. Loans extended to Non-Residents

7. Advance payment against imports

8. Payment towards imports-settlement of invoice

9. Imports by diplomatic missions

10. Intermediary trade

11. Imports below Rs.5,00,000-(For use by ECD offices)

12. Payment- for operating expenses of Indian shipping  companies operating abroad.

13. Operating expenses of Indian Airlines companies operating  abroad

14. Booking of passages abroad -Airlines companies

15. Remittance towards business travel.

16. Travel under basic travel quota (BTQ)

17. Travel for pilgrimage

18. Travel for medical treatment

19. Travel for education (including fees, hostel expenses  etc.)

20. Postal Services

21. Construction of projects abroad by Indian companies  including import of goods at project site

22. Freight insurance – relating to import and export of goods

[cafornri]

Impact of Budget 2019 on Non Resident India’s (NRI’s)

On July 5, 2019, Nirmala Sitharaman, India’s Finance Minister presented her maiden Union Budget in Indian Parliament. She did not disappoint either the Indian residents or the NRI Diaspora.

It was a decent budget focused on boosting infrastructure investment in India. Emphasis was made on enhancing transparency in taxation processes (including NRI taxation) and procedures by introducing initiatives such as the faceless assessment system and levy of TDS on cash payments above the threshold limit. Other initiatives which would be music to the ears of NRIs would be the renewed emphasis on Digital India and Digital Payments, large scale initiatives in infrastructure with big developments of airports and railway systems.

Here are relevant features of the Indian Union Budget 2019 concerning NRIs:

One important feature of the budget which merits attention from NRIs is the increased personal income tax rate due to an increase in the surcharge for very rich assesses. Effective NRI tax rates for incomes between INR 2 crores to INR 5 crores (USD 292,000 to USD 730,000) will go up to 39% and for incomes above 5 crores, it will reach as high as almost 43%. While this may not affect all NRIs, there would be some which will feel this pinch of higher NRI tax rates.

Other interesting feature of the budget which impacts NRIs is the changes in gift tax provisions. Any gift received by the NRI on or after July 5, 2019, which is more than INR 50,000 (USD 730) received from any resident Indian (other than a specified relative) would be taxable in the hands of the NRI. Any NRI receiving such a gift would be obligated to disclose this gift as an Income in India and pay NRI income tax according to personal tax rate slabs. Till July 5, 2019, thanks to a tax code loophole, such gifts received by NRIs could escape NRI taxation. This change is expected to bring some “benami” immovable property transactions into the tax net and also place controls over inappropriate transfers of money or property.

The provisions contained in the new Budget have extended the coverage of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, to retrospectively include non-resident Indians under the Act. Government of India plans to take action and tax those assesses who were residents when they created undisclosed assets outside India and then later migrated to become NRIs. Again this move may not impact many NRIs as regards to NRI taxation, but for some these provisions may prove to be a challenge.

One change which will bring relief for many assesses is the change in procedure to claim lower or nil tax deduction at source from income tax assessing officers. This process has now been made digital instead of the cumbersome manual process.

As many NRIs are already aware, any long-term capital gains arising on the sale of a residential property are exempt from Indian Income tax, provided the capital gains are reinvested in one residential house property. As a welcome move, now the Budget has a provision that will extend the benefit of re-investment to two residential properties. However, it also imposes a benefit limit of INR 2 crores (USD 292,000) and that it can be availed only once in the tax payer’s lifetime. This would be very good news for NRIs who may have significant inherited assets in India.

One more welcome move is the NRI tax exemption of notional rent. Currently, many NRIs enjoy exemption from tax on notional rent on one self-occupied house property. This Budget has proposed to extend this tax exemption to two self-occupied house properties. This means one can now own up to two residential house properties without having to pay any Income Tax on notional rent. Encouraging NRI’s to buy a second investment property seems to be intent behind this move.

This Budget also increases the threshold limit for tax deducted at source on rental income from INR 180,000 to INR 240,000. (USD 2,626 to USD 3,500). This increase in the TDS threshold should encourage more NRIs to invest in property in India.

The Budget offers an income tax waiver on the amount distributed on or after the 1st day of September 2019, by a Mutual Fund, who’s all unit holders are NRIs. While currently there are no mutual fund schemes where all unit holders are NRIs. This move may provide the motivation for Indian mutual funds to launch relevant schemes focused on NRIs

NRIs returning back to India are compelled to wait for 180 days before seeking an Aadhaar Card. This budget offers relief in this respect and now NRIs can apply for Aadhaar on arrival.

Interest earned on Rupee-denominated Bonds (RDB) taken between 17th September 2018 and 31st March 2019 has been exempted from income tax.

According to the new changes announced in the Budget the NRI Portfolio Investment (PIS) will be merged with Foreign Portfolio Investment (FPI). Simplification of documentation processes and an increase in statutory FPI investment limits is on the cards. This should give a significant boost to NRI investments in floating stock as the 24% limit may no longer prove to be restrictive.

The Budget also refers to a proposed event titled the “Annual Global Investors Meet”. This could bring further impetus to NRI Investments in India.

Overall, this 2019 Union Budget presented in the first year of the second term of the Narendra Modi government presents exciting possibilities and pathways for attaining the goal of a USD 5 trillion economy with better tax compliances and enhanced fiscal discipline.

[all-the-news]

Tax officers can issue certificates to avoid taking TDS from NRIs

Tax officers can issue certificates to avoid taking TDS from NRIs

I am a non-resident India (NRI) and I have a property in India. I am planning to sell the property as I am planning to buy a higher-value property. Will I have to pay Tax Deducted at Source (TDS)? Can I apply for nil TDS certificate? What do I need to do? Kindly explain. —Rajant Taxability on sale of immovable property: Sale of property situated in India will be taxable in the year of sale of…

[ezybizadviser]

NRI Taxation- Taxability of sale of property in India

Form 15CA and 15CB 

NRI Tax return

Like any Resident individuals, sale of property in India by NRIs are subject to capital gain tax on any appreciation made on such property. However, such capital gain tax may be avoided if such capital gain proceeds are invested in the manner prescribed under the Income Tax Act. Further, NRIs can also repatriate the sale proceeds of property outside India after payment of appropriate taxes and filing of form 15CA and 15CB.

Such sale of property and relevant capital gain tax on same need to be reported while filing NRI Tax return in India. Similarly, any income earned by NRIs by giving Indian property on rent would also be subject to tax in India after statutory deduction and such income will also form part of NRI Tax return in India.

It may be noted that all the transactions in India of NRIs relating to immovable property is governed by the guidelines issued under FEMA and RBI regulations.

Any person, not being Indian citizens and/or companies which are not incorporated in the country, are required to get prior permission of the RBI to acquire, hold, transfer or dispose of an immovable property in India.

TDS on Property

When a normal resident buys property from an NRI, she/he must have to deduct TDS at 20% if the property has been held for more than two years and at 30% if the property is being sold within two years. The deduction must include TDS plus surcharge, and education cess.

Documents required by NRI for selling property in India

1. Passport- It serves as a proof of identity for the person involved in the transaction 2. PAN Card- Some NRIs of select countries are to given PAN numbers which have their foreign residence address. 3. Tax Returns- If the NRI has been earning money from the property, tax returns for the ownership period should be kept. 4. Address Proof- Documents in support of address in India and abroad have to be provided like ration card, telephone bills, electricity bills, life insurance policy statements, aadhar card etc. 5. Sale Deed- Sale deed is a legally binding agreement between the buyer and seller. 6. Encumbrance Certificate- An encumbrance certificate is necessary to assure that the property has no dues to any legal authority.

The process of selling a property owned by an NRI in India is as follows:-

Ø  Hire a broker to conduct a comprehensive valuation of the property and determine its value.

Ø  Arrange all the necessary documents of the property.

Ø  The amount can be received only in a FCNR or NRE/NRO account

Ø  The NRI would be exempt from tax if he/she re-invests the capital gains of the property in another property or tax exempt bonds.

Ø  Capital gains are taxable in the year in which the property is transferred, irrespective of whether the sale payment has been received in full or not.

Ø  TDS is deducted at the time of making the payment to the NRI. All the information regarding the TDS and it’s rate have to be mentioned in the sale deed between the NRI seller and the buyer.

Ø  Any sale proceeds may be remitted outside India subject to payment of taxes in India and filing of form 15CA and 15CB.

Ø  Report the transaction relating to sale of property and capital gain or loss thereon while filing NRI Tax return in India.