Can I Get a TDS Refund? Canadian Citizen Sold a Flat and Paid 23.92% TDS

Ans: Yes, you can claim a refund in your IT return after adjusting for any tax payable from any other source of income in the same financial year.

Ans: Yes, you can claim a refund of TDS done at the time of sale of property. The procedure to claim a refund is as follows:
• PAN Card of both transferor & transferee is required.
• Transferee/purchaser needs to register himself/herself in TRACES with PAN.
• On deduction of tax u/s 194IA, the deductor needs to generate 26QB online.
• Tax payment needs to be made online within due date.
• On payment of tax, 26QB needs to be filled within due date.
• On successful filling of 26QB, TDS certificate in F16B can be generated online and needs to be issued to the deductee within due dates.
• In case of any alteration, Form 26QB can be altered online at TRACES.

For the above, you require the following information:-
1. PAN of the seller
2. PAN of the buyer
3. Date of payment
4. Amount of payment
5. TDS deducted

After completion of all the above steps, the system will show a tax credit in 26AS of the deductee. The Income Tax Department will process your refund request. Once the Income Tax Department has processed your refund request, the refund will be credited to your bank account within a few weeks.

Ans: With a substantial amount from the sale of your property and considering the impending liability for capital gains tax, it's essential to explore investment options that offer potential returns while also considering tax implications. Here are some suggestions:

Equity Mutual Funds: Invest in a diversified portfolio of equity mutual funds based on your risk tolerance and investment horizon. These funds have the potential to offer attractive returns over the long term, although they come with market-related risks.

Debt Mutual Funds: Allocate a portion of your funds to debt mutual funds, which offer relatively lower risk compared to equities. Debt funds invest in fixed-income securities like government bonds, corporate bonds, and money market instruments, providing stable returns.

Tax-Saving Investments: Explore tax-saving investment options like Equity-Linked Savings Schemes (ELSS), Public Provident Fund (PPF), or National Pension Scheme (NPS) to avail of tax benefits while generating returns.

Consult a Financial Advisor: Given the significant amount involved and the tax implications, it's advisable to consult a financial advisor who can assess your financial situation, goals, and risk appetite to provide personalized investment recommendations.

Remember to diversify your investments across asset classes to mitigate risks and achieve your financial objectives effectively. Additionally, consider the liquidity needs, investment horizon, and tax implications before making any investment decisions.

Ans: To save tax, you need to invest at least Capital Gain part of the transaction, in :
(a). Purchase of a Residential Property, with in time limit of one year before or two years after the sale of property generating Capital Gain.
(b). Purchase Capital Gain Bonds, issued by NHAI etc.
(c). You may spend Rs.60 lakhs (Rs.90.00 - 30.00 lakhs), as per your choice.
(d). In your question, last option suggested by you seems to be a good choice, which will ensure increase in your monthly income and also take care of Capital appreciation (provided the property is residential).
Most welcome for any further clarifications. Thanks.

Ans: When selling a flat for Rs 60 lakhs, the capital gains tax you will owe depends on how long you held the property. If less than 2 years, the profit will be taxed as short-term capital gains(LTCG) at your applicable income tax slab rate
If you held the property for more than 2 years, the profit is taxed as long-term capital gains at 20% with indexation benefits. Indexation adjusts the purchase price for inflation, which helps reduce the taxable amount.
for Example Let's say you bought the flat 10 years ago for Rs 30 lakhs. After applying indexation, your adjusted cost might be around Rs 45 lakhs (rough estimate). Your capital gains would be: 60L (sale price) - 45L (indexed cost) = 15L.The LTCG tax would be 20%(your income tax rate of Rs 15 lakhs, which is Rs 3 lakhs.
Now let’s see How to Save on Capital Gains Tax? You can save tax on long-term capital gains by investing in Section 54EC Bonds. The Bonds You Can Invest In are REC (Rural Electrification Corporation) Bonds/NHAI (National Highways Authority of India) Bonds, PFC (Power Finance Corporation) Bonds
The Key Features of Section 54EC Bonds are Maximum Investment: You can invest up to Rs 50 lakhs in these bonds within 6 months of selling the property. Lock-in Period: The lock-in period for these bonds is 5 years. Interest Rate: The current interest rate is around 5-5.25% per annum, but this can vary depending on market conditions.
Best regards,
Nitin Narkhede
Founder & MD, Prosperity Lifestyle Hub https://Nitinnarkhede.com
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