Is TAN quantity required earlier than registry of buy of an NRI property?

Is it obligatory to acquire a TAN quantity earlier than registry of buy of an NRI property? Can we deduct the quantity at prescribed price and submit registry deposit this as soon as we get our TAN as NRI has to go away urgently and TAN can’t be generated on this time. Parag Agrawal

As per Section 195 of Income Tax Act, an individual is required to deduct tax at charges in drive whereas making any cost of any quantity to a non-resident which is taxable in India. For buy of property from a resident, purchaser of property can be required to deduct tax at 1% in case the sale consideration exceeds 50 lakhs however he’s not required to acquire TAN (Tax deduction Account Number) however when the cost is being made to a non-resident he has to acquire TAN quantity for the aim of deposing the tax so deducted to the credit score of the central authorities. 

Since you’re shopping for a property from a non-resident you’re required to have a TAN quantity however solely on the time of constructing cost of the tax deducted to the credit score of the central authorities and never whenever you execute and register the settlement. The tax so deducted from cost made to a non-resident is required to be deposited to the credit score of the central authorities by seventh of the following month by which the tax is deducted. In case tax is deducted in the course of the month of March, you possibly can deposit the identical by thirtieth April. The tax is required to be deducted if any advance cost is made to the non-resident vendor else the identical may be deducted on the time of execution of the sale deed on the complete consideration even when full cost shouldn’t be being made on the time of execution of the sale settlement.

After deposit of the TDS to the credit score of the central authorities you’re required to file a TDS return additionally in kind no. 27Q inside prescribed time. In case the TDS is deducted in the course of the March quarter, it’s a must to file the TDS return by thirty first May 2022 and in case the TDS is deducted in the course of the month of April 2022, you possibly can file the TDS return by 31 July 2022. 

You can apply for TAN in kind no. 49B on line. I’m certain you’re going to get the TAN quantity earlier than the due date of cost of the TDS. Even if TAN shouldn’t be allotted to you by the due date of cost, you possibly can deposit the TDS after the due date however you could have to pay curiosity for the delayed cost.

Balwant Jain is a tax and funding knowledgeable and may be reached on jainbalwant@gmail.com and @jainbalwant on Twitter.

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