Payments made to NRIs are topic to TDS

I purchased a home in July 2017 by taking a house mortgage of ₹30 lakh from Axis Bank. In November 2020, I acquired the mortgage transferred to HDFC Bank with an excellent of ₹26 lakh. Can I declare a deduction underneath Section 80EEA, since I fulfill all the standards broadly?

—Keyur Vinchhi

As per the provisions of Section 80EEA of the Income Tax Act, 1961, a person is eligible to assert deduction in the direction of curiosity payable on a housing mortgage as much as ₹1.5 lakh per 12 months if the mortgage is sanctioned between 1 April 2019 and 31 March 2022, the stamp responsibility worth of the residential home property doesn’t exceed ₹45 lakh and the taxpayer doesn’t personal any residential home property on the date of sanction of mortgage.

As per the provisions of Section 80EE of the Income Tax Act, a person is eligible to assert deduction in the direction of curiosity payable on a housing mortgage if the mortgage is sanctioned between 1 April 2016 and 31 March 2017, the quantity of mortgage sanctioned doesn’t exceed ₹35 lakh, the worth of the residential home property doesn’t exceed ₹50 lakh and the taxpayer doesn’t personal any residential home property on the date of sanction of mortgage.

In the moment case, because the preliminary mortgage was sanctioned in July 2017 (i.e. earlier than 1 April 2019), on the time of acquisition of the residential home property, you wouldn’t be eligible to assert deduction underneath Section 80EEA of the Act. The subsequent switch of the beforehand sanctioned mortgage to a different financial institution for a similar home property might not be eligible for this deduction.

Further, because the preliminary mortgage was not sanctioned between 1 April 2016 to 31 March 2017, deduction underneath Section 80EE can also be not obtainable.

I’m within the course of of shopping for a property from a overseas nationwide. While the vendor has the requisite RBI approvals, I want to know find out how to pay TDS on the sale deed. Am I required to have a TAN to deposit the TDS?

—J. Nunes

We have presumed that the mentioned overseas nationwide qualifies as a non-resident of India as per Section 6 of the Income Tax Act, 1961.

The provisions of deduction of taxes at supply on funds made to non-residents are ruled by Section 195 of the Act. As per the mentioned provisions, any individual making a cost to a non-resident particular person is obligated to deduct on the charges in power on the time of credit score of such revenue to the person. Further, to hold out these compliances, you’ll be required to acquire a tax-deduction account quantity (TAN) in India as per Section 203A of the Act.

However, the place it’s thought of that the quantity paid by you doesn’t represent taxable revenue (both in full or half) within the arms of the payee, both you or the payee could make an software within the prescribed kind and method to the Indian tax authorities for a decrease tax deduction certificates or NIL tax deduction certificates underneath Section 195(2) and 195(3) learn with Section 197 of the Act.

Where such a certificates is obtained, tax is required to be deducted on the fee prescribed within the certificates for the interval specified.

You can also must adjust to different prescribed compliances on the time of constructing the remittance equivalent to Form 15CA, 15 CB, and many others., as could also be relevant.

Parizad Sirwalla is associate and head, international mobility companies, tax, KPMG in India.

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