LTCG tax for legal heirs

First of all understand the meaning of capital gain account scheme it's been made if someone wishes to invest in a house property later on he can invest in capital gain account scheme it's not a compulsion nor any way to save tax as and when you withdraw money from the account tax would be charged at same rate as it would have charged normally plus interest earned on same would be charged to tax.

I didn't understand how you are getting percentage share based on mother's will when she is alive and since you got land as inheritance you all are equal owners and you all need to pay tax equally. What investment have you made in property in 2009?

With regard to TDS there will be a difference as on resident TDS is deducted only if value of property is above 50 lakh whereas in case of NRI it is deducted irrespective of any value of land. With regard to tax there will only be a difference of slab rate not much. You all can apply for lower tax deduction certificate from your assessing officer. How would making relinquishment deed avoid LTCG?

You don't have to provide him TDS he will deduct TDS from the amount payable to you. You will have to provide him TDS calculation certificate from your assessing office.

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Thank you

1) By default, inheritance property is divided equally among the legal heirs unless the other party relinquish his share in favour of another. You can draft relinquishment and gift deed to decide the percentage among the members.On the basis of percentage decided, cost will be divided accordingly. The sale consideration should also be in the respective percentage and should be evidenced by the bank entries in the respective accounts and in the sale deed.

2) Siblings are NRI and mother is resident. It is better to divide the gain to reduce the liability. We need to evaluate the options.

3) Tax on LTCG is 20% which remains same at all stages till the gain is reinvested in the specified options. CG saving scheme is the option to those taxpayers who could not decided to invest till the filing of ITR but would like to invest within the period specified.

4) As the siblings are NRI, buyer should deduct the TDS on the sale consideration and not capital gain. You need to obtain lower deduction certificate from the AO which can be applied online and dub,it it to the buyer. TDS liability arises on the payment of the consideration.

Hello,

1. You will be taxed equally because of inheritance. With the help of relinquishment deed, you can your share in the property.

2. That would depend upon your salary income and your mother's pension income, as the benefit of basic exemption limit of Rs. 2,50,000 would be available in that case. To reduce LTCG tax, capital gain could be divided into all three of you.

3. Tax on LTCG would be same, either be it in the year of capital gain or withdrawal from CGAS account afterward.

4. TDS deduction is the responsibility of the buyer, he will deduct TDS at a specified at the time payment for the payment and remit the TDS to the government in your PAN, which would be available as a credit of tax at the time you file your income tax return for set off from your tax liability. You just need to provide him PAN of the sellers and a certificate of lower/nil deduction in case yours or your mother's income is below the tax exemption limit.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Dear Sir,

Hope you are doing well !!

1.It will be divided equally unless other party transfer his share through relinquish deed.

2. It is better to divide the gain for tax saving.

3. It would be same.

4. It is buyer's liability to deduct the tds. However, you can obtain nil/lower tds certificate for reduce the tds liability.

It is advisable to take a phone consultation for complete understanding.

Yes you would be eligible but it depends on the amount of capital gain that comes in each of your hand. You need to get the certificate before the sale from the assessing officer and give to buyer before taking payment so that he can deduct TDS accordingly.

Yes you need to file return for each share.

Yes you can remit there is no issue on income tax part.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

1. Whether you will be eligible for lower/nil deduction would depend upon the capital gain amount. If eligible, you need to obtain it in advance before you receive the consideration for the property.

2. Yes, you all would be liable for tax on your share of the capital gain of the property, but this means you would be eligible to take benefits of basic exemption limit.

3. Yes, you can.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Hi,

1. Yes, you can apply for a nil/lower TDS certificate u/s 195 online on the income tax portal. You should receive it within a month of applying. This should be done before receiving any payment with respect to the sale.

2.Yes.

3. Yes depending upon the FEMA threshold. The threshold is 1 mn. usd if I am not wrong.

1.Yes, you are eligible for lower/nil certificate.

An application for nil/lower deduction of TDS using the FORM 13 is required to be filed with the Assessing Officer(TDS) for seeking permission. Such Form 13 can be filed either online or manually. 

2.Yes, your understanding is correct.

3.Yes, you can do that.

1. It is online.

2. Yes. rate is 20%

3. Yes

Hello Sir,

1.Yes, It will  be taxed equally on LTCG, and later on CG scheme withdrawal.

2.It is advisable that to divide the capital gain equally to save more taxes as your mother is falling in senior citizen slab. It will be reduce overall tax liabilities.

3. The capital gain tax liability will be same in both cases.

4.As per the Indian Income Tax Act, when a resident purchases any property from a non resident, he has to deduct income tax (TDS) and pay the balance amount to the seller.

He has to deduct 20% of the sale consideration as tax before making the net payment to seller.

Buyer should first obtain TAN under section 203A of the Income Tax Act, 1961 before deducting TDS. TAN can be obtained by applying buy filling up the Form 49B.

TDS must be deducted at the time of making the payment to the NRI. The information about the TDS being deducted and the rate at which it was deducted should be mentioned in the sale deed between the NRI seller and the buyer.

The TDS deducted by the buyer should be deposited through Form number or challan for TDS payment on or before the 7th of next month in which the TDS is deducted.

The TDS can be deposited through banks that are authorised by government of India or the Income Tax Department to collect Direct Taxes. The deposit has to be made by the buyer.

However, it is better to obtain nil/lower tds certificate online to reduce the tds liability.

1.You can apply online for nil/lower tds certificate.

2. Yes.The rate is 20%.

3 Yes.