| QUERY: | On sale of ancestral property by NRI at what rate TDS to be deducted by the purchaser? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 11(2), 195 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Deduction at source - Non-resident -Sale of Property by NRI |
If income of non-resident is chargeable in India, the purchaser has to deduct the tax @ 20% being rate in force, as per section 112 of the Act.
| 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: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 195 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Deduction at source - Non-resident -TDS on purchase of property by NRI |
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.
| QUERY: | X purchased a vacant site in Andhra Pradesh from Y (Non-Resident) for sale consideration of Rs. 25,00,000/-, in the Financial Year 2010-11, without deducting TDS. Whether section 195 of the Income-tax Act, 1961 would be applicable? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 195 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Non-resident, tax deducted at source |
The objective of this section is to ensure that the tax on the income of non-residents and foreign companies is deducted at source, so that the department is not put to the trouble of recovering it from such persons whose connections with India,
| QUERY: | Whether TDS u/s. 195 is required for advertisement on Facebook, Google etc? In the era of e-commerce and social networking, a lot of Indian Companies are using social marketing by placing advertisement on sites like Facebook, Google etc. These sites are owned by non-residents and payments are usually made using credit cards. Whether TDS provision u/s. 195 are applicable to such payments? Further website neither allows any reduction in payments nor their PAN is available with the payer. In such scenario how TDS obligation is to be discharged? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 195 |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Non-resident, tax deducted at source |
No TDS is required to be deducted, as neither of the above companies have PE in India and payments made to them for advertisement cannot be considered as ‘royalty’ as held by the Mumbai Tribunal
| QUERY: | XYZ is engaged in the business of manufacturing and export of various chemicals. It pays commission to various overseas agents, who procures orders for it from outside India. The Commission is payable only on actual export sales routed through the agents. The question is whether it is necessary to deduct tax at source under section 195 on export commission in view of withdrawals of circulars bearing no. 23 dated July 23,1969 and bearing no. 786 dated February 7, 2000. |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 195, 5(2)(b), 9(1)(i) |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | commission, Non-resident, tax deducted at source |
Even though, the circulars stated above have been withdrawn vide circular no. 7 of 2009 dated October 22,2009, no TDS is required to be deducted as no income is chargeable to tax under section 195 of the Income-tax Act, 1961, as non-resident selling agents have rendered the services outside India for procuring the orders and commission is payable to them outside India.