Opinion Of Eminent Legal Luminaries On Controversial Issues

Deduction at source – Non-resident -TDS on purchase of property by NRI

QUERY: NRI (US citizen) wants to sell his ancestral property. Can the said sale proceeds be transferred from India directly or any RBI permission will be required?. At what rate TDS deductible by purchaser? Whether it would be 30% of sale consideration or 30% of LTCG,
ANSWER: As per Regulation 6 of Foreign Exchange Management (Remittance of Assets) (Amendment) Regulations 2014, dated October 31, 2014 the NRI / POI has been permitted to remit not exceeding US$ 2.5 lakhs per financial year of balance held in NRO accounts or sale proceeds of assets or sale proceeds of assets acquired in India by way of inheritance / legacy without prior permission of RBI. If the remittance is in relation to sale proceeds of immovable property the condition is that the property or deposit cumulatively must have been held for a period of ten years.
The purchaser is liable to deduct tax while making payments to NRI on the amount “chargeable under the provisions of the Act” as per section 195 and as per GE India Technology Centre P. Ltd. v. CIT [327 ITR 456 (SC)].
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