Question And Answer
Querist: Karan
Answered by:
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Date: July 12, 2022
Query asked by Karan

Respected Sir,

Can you share the judgement, wherein it has been held that – if the seller of immovable property is NRI, the buyer can deduct tax (TDS) on NET CAPITAL GAIN if the seller furnishes CA CERTIFICATE WITH CAPITAL GAIN WORKING.

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As we understand an NRI wishes to sell his property and desires that TDS may be deducted not on gross proceeds rather on net proceeds.

The Hon’ble ITAT Hyderabad Bench in the case of DCIT v. Kamineni Hospitals (P.) Ltd [2020] 117 642 (Hyd)( Trib.) remanded back to AO with a direction to assessee to establish that NRI vendor had deposited sale consideration of residential property in LTCG scheme within stipulated time period in compliance with first proviso to section 201(1A) and, thus, assessee was not required to deduct tax at source under section 195 of the Act while making payment in question to said NRI vendor.

However, to avoid the hassles of litigation on the buyer, it is advisable to procure a no tax or low tax deduction certificate under section 197 of the Act.

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