Who can claim a TDS refund on property?
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The seller of the property is the individual or entity who can claim a TDS (Tax Deducted at Source) refund, provided the amount of tax deducted by the buyer is greater than their final income tax liability.
Who is eligible for a TDS refund?
Who is eligible for a TDS refund? A TDS refund is applicable to individuals whose tax deducted at source exceeds their actual tax liability. This often happens when deductions, exemptions, or lower income tax brackets result in overpayment of taxes compared to the amount deducted at source.
Who can claim TDS on purchase of property?
Properties Covered
Interestingly, the power to deduct TDS on a property purchase lies with the buyer, not the seller. According to Section 194IA of the IT Act, the buyer must deduct 1% of the sale amount for a property costing above ₹50 Lakh. The deduction applies to all properties, land, residential, and commercial.
Can NRI claim TDS on sale of property?
TDS on sale of property by NRI must be deducted by the buyer under Section 195 before making payment. As per Budget 2024, the TDS rate on purchase of property from NRI (Section 195) is 12.5% for LTCG and as per slab rates for STCG, with no indexation benefits.
Can an NRI get a TDS refund?
Yes, NRIs can claim a refund on property sale TDS if the tax deducted exceeds the actual tax liability. Property transactions often involve higher TDS rates based on the section applied by the buyer.
Can we claim refund on TDS deducted?- Property Hotline
Is TDS 100% refundable?
Q- Is TDS 100% refundable? The amount of TDS refund you receive depends on the amount of tax liability you have. For example, if your income is not taxable, still your TDS was deducted, and you might be eligible for a 100% tax refund.
Can I get a refund in my NRI account?
Claiming a refund as an NRI involves confirming your NRI status under Section 6, calculating your taxable Indian income including interest, rent, or capital gains, verifying TDS entries in Form 26AS, filing the appropriate ITR (ITR-2 or ITR-3), completing e-verification, and tracking the refund via the Income Tax ...
How to avoid TDS on sale of property?
Reducing the TDS liability with LDC
Before the sale transaction, you can register on the TRACES portal and apply online for an LDC in Form 13 along with the requisite documentation to the Income Tax Assessing Officer (AO) in India.
What if NRI sell property in India?
During the sale of property by an NRI, the buyer is responsible for deducting Tax Deducted at Source (TDS). The standard NRI TDS on property sale is 20%. However, if the property is sold before two years (as calculated from the date of purchase), a higher TDS for NRI property sale (30%) will be applicable.
What happens if the seller doesn't have a PAN?
The seller's PAN is mandatory to obtain. If the PAN is not available, TDS is to be made @ 20% of the purchase value, and then the seller will not get the credit of the TDS amount.
What happens if TDS is not deducted on property purchase?
Non-compliance with TDS provisions in property transactions can lead to significant legal and financial consequences for the buyer. If TDS is not deducted or paid on time, the buyer may face interest chargesof 1.5% per month on the overdue amount, along with penalties under Section 271C of the Income Tax Act.
How much tax do I pay when I sell my property in India?
Q- How much tax on capital gains property sale? At the present date, the long-term capital gain on property is calculated at a 20% tax rate with some additional cess and surcharge rates if applicable. However, short-term capital gain from a property is charged at the normal slab rate.
How does TDS affect the buyer and seller?
The TDS is a document containing multiple pages. This document conveys important information, including the major defects of a given property. Any information stated on the TDS can affect the buyer's decision to move forward with the sale. The document can also be used in court if the buyer sues for non-disclosure.
How to claim 100% TDS?
Follow these steps to claim your TDS refund smoothly:
- Calculate Total Tax Liability.
- Collect TDS Details.
- File Income Tax Return (ITR)
- Verify Your Return.
- Wait for Refund Credit.
What are the common mistakes in TDS?
TDS Filing Software: Avoid These 7 Common Mistakes for Accuracy
- Using Outdated or Non-Compliant TDS Filing Software. ...
- Wrong PAN, TAN, or Section Mapping During Data Entry. ...
- Delayed Payment or Late Return Filing. ...
- Challan Errors or OLTAS Mismatch. ...
- Missing or Late Generation of Form 16 / 16A.
What documents are needed for TDS refund?
Collect the Necessary Documents: Gather all the supporting documents, such as bank statements, payment receipts, invoices, Form 26AS, and any other relevant information. Verify TDS Details in Form 26AS: Before claiming TDS, cross-check the details of the TDS deduction in Form 26AS.
How to avoid taxes when selling property in India?
Strategies to Save Capital Gains Tax on Property Sales
- Joint Ownership. ...
- Reducing Selling Expenses. ...
- Holding Period. ...
- Availing Indexation Benefit. ...
- Buying a New Property (Exemption under Sec 54) ...
- Buying a New Residential Property (Exemption under Sec 54F) ...
- Tax Loss Harvesting. ...
- Investing in Bonds (Exemption under Sec 54EC)
Can OCI inherit property in India?
Yes, a person resident outside India (NRI / OCI) can inherit and hold immovable property in India from a person resident in India or Person resident outside India.
Can I sell my property in India from abroad?
As a Non-Resident Indian (NRI)/Overseas Citizen of India (OCI), you may sell any immovable property in India, including residential or commercial, to a person resident in India or another NRI/PIO/OCI.
Who can claim TDS on sale of property?
Can TDS on Property deducted by buyer be claimed by seller? Yes, TDS on property is refundable. At the time of sale of property, buyer is required to deduct TDS on property and deposit the same with the government. But, the seller is allowed to avail credit of the same or claim TDS refund by filing his ITR.
How to claim TDS refund for NRI?
To claim a refund of the TDS Deducted, the NRI would be required to file an income tax return in India after the end of the financial year. While filing the Income Tax Return, the NRI would be required to self compute his income and the income tax liability as per the slab rates.
How long do you have to buy another house to avoid capital gains in India?
Taxpayer should not purchase any other house within 2 years or construct one within 3 years from the transfer date. If the above conditions are not satisfied, then exempt Capital Gains taxable in the year in which such other residential house is purchased/ constructed.
How can I get my TDS refund back?
In case your taxable income is below the basic exemption limit, you can avoid TDS deduction from your salary. If the actual tax payable is less than the TDS, you must file Income Tax Return (ITR) to claim TDS refund. While filing the ITR online, you need to provide the details of a bank account and IFSC code.
What is the law on getting a refund?
You don't have an automatic right to get your money back if you just change your mind about something you've bought and there's nothing wrong with it. It's the same no matter how expensive the item was - it's really down to the seller whether they offer you anything.