FAQs for NRIs for applying for Lower Deduction Certificate by filling Form 13
This article lists out the processes and frequently asked questions for NRIs looking to fill Form 13 for applying for Lower Deduction Certificate.
FAQs for NRIs for applying for Lower Deduction Certificate by filling Form 13
Posted on 02 Aug 2024
Author: Sayan Sircar
7 mins read
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This article lists out the processes and frequently asked questions for NRIs looking to fill Form 13 for applying for Lower Deduction Certificate.
This article is a part of our detailed article series on property deals between an NRI seller and a resident Indian buyer. Ensure you have read the other parts here:
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Complete Tax Guide for NRIs Selling Land in India
This article simplifies the process of selling land in India for NRIs, offering clear insights on how to manage TDS deductions, understand the differences between urban and rural agricultural land, and calculate capital gains tax.
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Which are the important points to keep in mind when buying a house from an NRI seller?
The article lists out the important points and steps that a resident Indian buyer should keep in mind when purchasing property from an NRI seller.
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FAQs for NRIs for applying for Power of Attorney (PoA) for selling a house in India
This article lists out the processes and frequently asked questions for NRIs looking to create a Power of Attorney for selling their house in India.
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How should NRIs sell property in India?
The article lists out the important points and steps an NRI property seller must keep in mind while selling property in India.
📚 Topics covered:
- When should an NRI apply for Lower Deduction Certificate by filling Form 13?
- What is Form 13 Under Section 197?
- When should an application be submitted using Form 13?
- What are the required documents for filling Form 13?
- Why should an NRI keep filing Income Tax Returns if they need to fill Form 13?
- Can an NRI fill Form 13 online?
- What is the procedure for filing Form 13 lower deduction of TDS?
- What are the steps to apply for the Form 13 online?
- What are the documents specific to filling Form 13 for property sale?
- Is the application of TAN mandatory to get the Lower Deduction Certificate?
- What is the TDS rate if the Lower Deduction Certificate is approved?
- How long does it take to get the Lower Deduction Certificate?
- Should an NRI use the services of an India-based CA for filling Form 13 for lower deduction certificate?
- What is the validity of the Lower Deduction Certificate?
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When should an NRI apply for Lower Deduction Certificate by filling Form 13?
When NRIs sell property in India, the buyer must deduct a minimum 20% (plus cess) of TDS. This TDS amount is then adjusted against the next year’s income tax return filed by the NRI. Applying for Lower Deduction Certificate by filling Form 13 will lower this TDS amount.
What is Form 13 Under Section 197?
Form 13, under section 197, is a document that allows you to claim lower or non-deduction of tax at source (TDS). If the lower deduction is approved, the buyer will then deduct lesser TDS when paying you for the property.
When should an application be submitted using Form 13?
It is best to apply for the Form 13 at the beginning of the financial year (April onwards) and provide a projection of the whole year’s income.
What are the required documents for filling Form 13?
The required documents for filling Form 13 include, at the minimum, the income tax returns for the last three years and a projection of the current year’s income.
Why should an NRI keep filing Income Tax Returns if they need to fill Form 13?
Form 13 application requires a history of filing income tax returns for at least three years. Even if you do not have income in India as an NRI, it is best to file a null return by 31st July every year.
Can an NRI fill Form 13 online?
Form 13 application can be done online from the TRACES website.
What is the procedure for filing Form 13 lower deduction of TDS?
NRIs can fill this form online for convenience using the TRACES portal. Once approved, the Lower Deduction Certificate will be issued by the Assessing Officer (AO)
What are the steps to apply for the Form 13 online?
To apply for Form 13 online you need to use the TRACES portal. The process is straight-forward to register and fill the form online.
What are the documents specific to filling Form 13 for property sale?
Documents for filling Form 13 for property sale, apart from previous years’ ITR will be bank statements showing payments for the property during the original purchase, agreement for sale, memorandum of understanding (MOU) with the buyer, capital gains calculation, circle rate information, document chain for the property including all sale deeds etc. Depending on the case, the Assessing Officer (AO) may ask for additional documents.
Is the application of TAN mandatory to get the Lower Deduction Certificate?
The NRI must apply for a TAN (Tax Deduction and Collection Account Number) from the TRACES website for filling Form 13.
What is the TDS rate if the Lower Deduction Certificate is approved?
The Lower Deduction Certificate, if approved and there is never a guarantee that it always will be approved, lowers the TDS rate to single digits.
How long does it take to get the Lower Deduction Certificate?
The entire process from application to issuance of the Lower Deduction Certificate can take a few weeks to a few months depending on the quality of the documentation, competence of the CA/NRI in dealing with questions from the Assessing Officer, and of course a general level of luck required with any kind of manual dealing with Government bureaucracy. It is best to keep the buyer appraised of the entire LDC process with regular progress updates.
Should an NRI use the services of an India-based CA for filling Form 13 for lower deduction certificate?
Utilising the services of a local CA in India offers multiple benefits including: 1. Physical follow-ups at the Income Tax office 2. Promptly answering queries of the Assessing Officer (AO) and submission of additional documents. 3. Expertise with this particular activity with previous clients
What is the validity of the Lower Deduction Certificate?
Lower Deduction Certificate is valid for a specific financial year unless cancelled earlier.
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This post titled FAQs for NRIs for applying for Lower Deduction Certificate by filling Form 13 first appeared on 02 Aug 2024 at https://arthgyaan.com
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