Realty Blogs

Lower Tax Deduction Certificate in case of NRI’s selling property in India TDS Applicability On Property Sale Transactions By Non Residents (NRIs) As per Indian Tax Laws, TDS provisions apply on various financial transactions in India. TDS is also applicable on Property Sale Transactions in India. In relation to property sale matter, If the seller is Resident Indian, TDS rate is 1% and governed by section 194IA. However, if the seller is Non-Resident (i.e. NRI, OCI, Foreign Residents), TDS is governed by Non-Resident TDS provisions i.e. section 195. Under the Non-Resident TDS Provisions i.e. Section 195, TDS rates apply at the maximum rates on the Sale amount of Property. This rate is 20% if property is long term capital asset. The rate is is 30% if property is short term capital asset. Applicable surcharge and 4% cess is extra. TDS Rate and Difficulties On Non-Resident Property Seller Generally, in all property sale transactions, it happens that the actual tax liability in the hands of tax payer (non-resident seller) is lesser than the proposed TDS on that transaction. The pain of Non-resident property seller can be understood by an example. E.g. An NRI agrees to sell a property @ Rs 1 Crore, and property purchase cost (after indexation) in the hands of NRI is Rs 95 lakhs. Hence, a capital gain arises for Rs 5 Lakh only. Now, as per Non-Resident TDS provisions (Sec 195), considering property is long term asset (i.e. holding period exceed 2 years) the applicable TDS is 22.88% (20% + SC 10% + cess 4%) of sale amount i.e. Rs 22.88 Lakh. Though actual tax liability is Rs 1.04 Lakh only i.e. 20.80% of Rs 5 Lakh (20% + 4% cess; SC not applicable on below 50 Lakh Rs gain). Hence, in the above situation, as per applicable NRI TDS provisions 22.88 Lakh TDS will be deducted against actual tax liability of Rs 1.04 Lakh. Though, NRI can claim the excess TDS refund (Rs 21.84 Lakh) through filing of ITR. However, it is a time taking process. If TDS deducted on full amount, Non-resident money will be blocked with Income Tax Department for a long time, which causes loss of bank interest also. Hence, this is a Genuine Hardship on the Non-residents(NRIs, OCIs) in relation to their property sale matter transactions in India. To overcome this situation, Income Tax Act provides for Lower TDS Certificate (or also called as TDS Exemption Certificate) under section 197 of Income Tax Act NRI Lower TDS Certificate or TDS Exemption Certificate – Section 197 To seek relief in the Withholding Tax Rates, NRI/Foreign Citizen can apply for Lower TDS Certificate (TDS Exemption Certificate) with the Jurisdictional Income Tax Authority. On submission of documents, the application moves to the Jurisdictional TDS Certificate Officer. The officer review the application and raises observations & further requirements if any. On satisfying all the concerns, the officer processes the certificate and allow Lower TDS to the NRI/Foreign citizen in relation to the transaction. On receipt of the Lower TDS Certificate (or TDS exemption certificate) the buyer deducts the TDS as per Certificate. Hence, through this process NRI/Foreign citizen gets TDS relief before the sale transaction, and avoid blocking of their money with Income Tax Department. Synopsis To reduce TDS on a property sale by NRI he is needed to furnish the application within the income tax department to provide the certificate for Nil/ Lower Deduction of TDS. the same certificate assists the NRIs in reducing the TDS liability, and hence most NRIs chooses for the same certificate. But furnishing the form is a tough chore also Communication with Income Tax Authorities for getting Certificate is also tough task thus the majority of NRIs opt for the chartered accountant to furnish the application. Author Details: CA Anand Sham Chandak Proprietor, CA. Anand Sham Chandak & Co. Chartered Accountant ca.anand.chandak@gmail.com

 You must be wondering how networking is connected with a tree? Well, Read on and see how even nature shows us in its infinite wisdom how growth is connected with your network. NETWORKING AND THE CHINESE BAMBOO TREE One of the tallest trees in the world is a tree called the “Chinese Bamboo”.  This tree grows to a height of 80 feet or so. It takes the tree almost 5 years and 3 months to grow to its full height. Here is the fun fact – for the first 5 years, this tree only grows less than 1 feet tall. It shoots up from 1 feet to all of 80 feet in just the next 90 days. So, what is it doing for the first 5 years? – It is building its NETWORK of roots under the ground so that it can support the entire tree. I believe there is no better way of learning than by nature and even nature teaches us that for achieving the best of things, we need a network to support the same like the Chinese bamboo shows us. So, what if we became impatient in between and removed the tree and tried to check as to why it was not growing? Would it grow any faster? Not really and in fact it might just slow the growth or kill the tree. So if your networks are not working as you wanted them to, finding a new network or a new set of friends or people seems like a solution at times instead of taking the efforts to deepen our relationships and invest better time there to help them grow faster. This is the network who will help you to achieve your goals in life. So, we need to choose the set of people we network with carefully rather than randomly and we need to make sure these set of people become your referral partners across time. You need to feed and cultivate such relationships and then wait for them to grow and bloom just like any farmer.                                                                                                                                                            

A Journey of Interior Design Excellence Established in 1989, our journey in the world of interior design began with humble origins in the picturesque town of Satara. At a time when interior designing was relatively unknown in the region, we sought to bring our expertise and passion for design to our native place. Though our initial days were challenging, we remained committed to utilizing our knowledge and skills to serve the nation through our work. For 18 years, we diligently practiced our craft in Satara, constantly pushing boundaries and redefining interior design norms. Our dedication paid off, and in 2006, we expanded our operations to Pune, a decision that brought numerous benefits and opportunities. Over the course of 34 years, we have proudly left our mark in various sectors. From designing exquisite high-end residences to creating functional and aesthetically pleasing spaces in hospitals, hospitality establishments, auditoriums, government offices, banks, education institutes, and museums, our portfolio spans a diverse range of sectors. Our commitment to excellence and innovation has not gone unnoticed. We were honored to be felicitated as pioneers of design in the Western region, a recognition that validates our unwavering dedication to our craft and our clients. As we reflect on our journey, we are grateful for the trust placed in us by our clients, allowing us to transform their spaces into stunning, functional works of art. With each project, we strive to create environments that inspire, engage, and uplift the human spirit. Looking ahead, we remain steadfast in our pursuit of design excellence, continuously evolving and embracing emerging trends and technologies. Our passion for creating exceptional spaces remains undimmed, as we continue to contribute to the vibrant tapestry of interior design in our beloved nation. Our story is one of perseverance, innovation, and a deep-rooted commitment to quality. From our modest beginnings in Satara to our thriving offices in Pune and beyond, we are proud to have played a significant role in shaping the interior design landscape. We look forward to the exciting challenges and opportunities that the future holds, as we continue to make our mark, one space at a time. MILIIND CHORRGE & ASSOCIATESS cmiliind@gmail.com

ORIGINALITY RECOGNITION AND BRAND PROTECTION: THE TRADEMARK WAY Recently, I was driving to a place for a business assignment, so I took a break. I parked my car and looked around. I found a hostel named Kinara. I was relieved, but before I could proceed to Kinara, I realized there was another hotel named Hotel New Kinara. Wow! I was just contemplating which one I should choose. However, before I could decide, I discovered yet another one i.e. Hotel Original Kinara. I decided to just avoid all these and find another hotel. I’m sure most of us have faced similar situations. We can accommodate or handle such situations when we spend a few hundred Rupees. But when you end up buying a flat from the wrong builder thinking of that was the original one then probably you won’t forgive yourself. Confusion of names or brands of builder is a big problem faced by common people. Trademark protection plays a vital role in safeguarding the brand assets of real estate businesses. By registering brands for essential elements such as logos, slogans, and names, the brand owner secures exclusive rights and prevent unauthorized use. It means that the owner of the registered trademarks has right to enforce their right to stop unauthorized use of their brand name or deceptively similar brand names. In the bustling real estate market, confusion can arise when multiple businesses adopt similar or identical brands. This confusion not only damages a company’s reputation but also results in loosing opportunities. Unscrupulous individuals may attempt to capitalize on the success of established brands by imitating their logos or similar names. Trademark protection is essential for real estate businesses to combat such infringements and unique identity in market. It is important to note that the original brand owner will always be able secure the brand registration over non-original. A person who adopts and uses the brand name first will get priority over any other person that has adopted the same or similar brand while registering the brand. Those who are using brand names but have not registered that till today must get the brand registered by proving the prior use. The trademark registry registers only brands that prove originality in adoption of the brand. Hence dealing with owner of a registered brand gives a confidence to a prospective buyer that he is dealing with the original party. A buyer of a flat in an apartment must make sure that he is dealing with a right builder by checking on the brand, logo registrations, and only after the confirmation of the originality/registration of trademark, he should proceed with booking the flats. Adv. Anand Mahurkar Founder, AM Legal Associates. anandm@amlegalassociates.com Note: Author of this article is a lawyer practicing in the field of intellectual property laws.