Inherited property
A GOVIND
(Querist) 10 December 2013
This query is : Resolved
Dear sirs,
Thank you so much for clarifying my doubt on the above subject which I had posted here a few days ago.
Please advice on the below.
My late mother's house property which she constructed in 1993 is now being sold at a consideration which is above Rs 50 lakhs but less than 75 lakhs. There are 3 legal heirs for the property out of which one is a non resident. As per expert advice given by one of the members in this forum, if the total value is less than 150 lakhs, TDS can be avoided if DEED is executed with one third right for each legal heir where by the total consideration of each heir will fall below Rs 50 lakhs thereby avoiding TDS. I have the following query.
1. Could any one guide me as to what kind of a DEED could be executed favoring each heir to avoid TDS burden?Is there any specific format which i could refer?
2. One of the legal heirs being a non resident, is there anyway the non resident can relinquish/surrender his right on the property in favor of the remaining two heirs ? Please advise.
Thank you in advance for your support and guidance
A Govind
R.K Nanda
(Expert) 10 December 2013
consult tax lawyer.
Rajendra K Goyal
(Expert) 10 December 2013
Sale deed above Rs. 50 lacs attract TDS as per Section 194-IA amendment applicable from 1st June, 2013.
A NRI may relinquish his right in the property or give a power of attorney. TDS is also applicable for sale of property by NRI on the capital gains.
Vineet
(Expert) 10 December 2013
In case of sale by NRI, withholding tax is applicable on entire capital gain.
For the rest, sale deeds for individual shares in property can be executed. But the registration charges and other incidental expenses will be applicable for each registration which will be more than the TDS which you propose to avoid (and not SAVE).
The NRI may relinquish or gift his share to another person but please check applicability of stampt duty which will much higher than saving on TDS again!!! Appointment of POA will not help as ultimately tax incidence comes only on the seller which in this case are three legal heirs.
I would suggest to keep it simple and transact through single registered sale deed. TDS and withholding tax as the case may be will be applicable.
