Sunil jain (manager) 09 March 2014

Tax liability for buyer if seller is nri

Dear Sir,

I am planning to buy a property in Noida. its ready to move property but registry has not done yet. Seller is NRI. If i buy this property what is the Tax Liability on this property. I have to pay Tax on total amount or what amount I have to pay in Income Tax.

Thanks

Sunil Jain

Reply Follow

1 Replies

R RAJAGOPALAN (ADVOCATE) 10 March 2014

YOUR QUERY:: "I am planning to buy a property in Noida. its ready to move property but registry has not done yet. Seller is NRI. If i buy this property what is the Tax Liability on this property. I have to pay Tax on total amount or what amount I have to pay in Income Tax.'

Reply: 1. Have clear explanation about the source for the price you pay, and the registration expenses you are going to meet. Pay the price through banking channels only.

2. Take note of the provisions of Section 194- IA of the Income tax Act 1961, as per which you will have to deduct tax at source if the price is more than Rs 50 lakhs.

3. After purchase if you let out the house, you will have to include the rental income in your taxable income, after the statutory deductions. If you are not letting it out, and you are having one or more houses similarly self-occupied, the notional Annual Letting Value of only one such house is exempt from tax.