On the capital gains, the NRIs who are selling the house property located in India need to pay tax. It just relied on the short-term or the long-term capital gains on which tax is to be paid.
The tax on the long-term capital gain is when the house property is sold post to the duration of 2 years (Reduced from 3 years to 2 years in Budget 2017) from the owned date. If it is held for two years or below then it is said to be short-term capital gain. The tax consequences for the NRIs are indeed liable to apply in the case of inheritance.
When the case is about the property which has been inherited then you must acknowledge the buying date of the real owner to compute whether the same is long or short-term capital gains. Towards the case that the property price would be the cost of the former owner.
The form and the amount of deduction of TDS if the seller is an NRI are elaborated in the information below in the given article. The post will mention the major points and details on the sale of the property and the applicable TDS within the compliance of the seller.
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How Much Tax is to be Furnished?
The long-term capital gains are taxed under 20% and the short-term gains would be taxed with the subjected income tax slab rates for the NRI established on the total income which is taxable in India towards NRI.
Deductible TDS on NRI Property
A 20% TDS is subjected to get deducted on the property sell-by NRI if the property sold prior to 2 years (reduced from the date of purchase) 30% TDS would be subjected to apply.
TDS Applicability and Deduction on NRI Property Sale
When any property has been bought or sold the TDS is needed to be deducted. The buyer when furnishing the amount to the seller would deduct some amount known as TDS and furnish the balance to the seller. The amount that gets deducted through the buyer will be needed to get deposited with the income tax department through the buyer.
The amount deducted relied on the residential status of the seller. If the seller is a resident Indian then the amount of the TDS to get deducted will be 1% of the sale price and when the seller is an NRI then the TDS deducted relies on the quantum of the money obtained by the seller.
The residential status of the seller shall be acknowledged to calculate the TDS amount to get deducted while the residential status of the purchaser shall not be acknowledged.
The way and the amount of TDS towards the case the seller is a resident Indian is discussed here. TDS @ 1% on the sale of property by Resident Indian.
The form and the amount of deduction of TDS if the seller is an NRI who elaborate the information below.
Applicable TDS Rate on NRI Property Sale
TDS on the sale of the property through NRI needs to be deducted under the rates elaborated:
| Nature of Capital Gains | Description | TDS Rate on Sale of Property by NRI |
|---|---|---|
| Long Term Capital Gains | Property held for more than 2 years | 20% |
| Short Term Capital Gains | Property held for less than 2 years | Income Tax Slab Rates of Seller |
Surcharge and cess will be imposed on the above-mentioned amount.
Thus the effective TDS rate on the property sale via NRI towards the long-term capital gains is mentioned as:
| Particular | Property Sale Price (Rs.) | |||
|---|---|---|---|---|
| Less than 50 Lakhs | 50 Lakhs to 1 Crores | Above 1 Crores | ||
| Long Term Capital Gains Tax | 20% | 20% | 20% | |
| (Add) | Surcharge | Nil | 10% of above | 15% of above |
| Total Tax (incl Surcharge) | 20% | 22% | 23% | |
| (Add) | Health & Ed. Cess | 4% of Above | 4% of Above | 4% of Above |
| Applicable TDS Rate (incl. Surcharge & Cess) | 20.8% | 22.88% | 23.92% | |
“Earlier higher surcharge was levied if the property value was more than Rs. 2 Crores and even higher if property value was more than Rs. 5 Crores. However, in Budget 2022 – the maximum surcharge which has been levied has been capped at 15%. And therefore, irrespective of whether the property value is Rs. 1 Crores or Rs. 5 Crores or Rs. 10 Crores – the rate of TDS will remain the same i.e. 23.92% (applicable w.e.f. 1st April 2022)”
Towards the case of short-term capital gains that is the property owned for less than two years via a seller, this surcharge and cess shall be added to the subjected tax rates under the income tax slabs in this way as elaborated above for the long-term capital gains.
Upon the payment made a TDS needed to be deducted by NRI for buying the property. If any advance is given for the property buying TDS is needed to get deducted.
The buyer is urged to deposit the TDS with the Income-tax department saying that the same is the TDS that gets deducted via payment that the NRI has been made.
Furthermore, the TDS on the buying of the property via NRI needs to be deducted even if the transaction value of the property is. Despite the property value coming across Rs 50 lakhs the TDS is needed to get deducted.
Amount upon Which TDS is Deducted Under Section 195
Under section 195 the TDS on the sale of the property via NRI is needed to get deducted and is ideally needed to be deducted on the capital gains. However, this calculation of the capital gains would not be performed by the seller himself and must be executed via an income tax officer.
The seller would furnish the application in Form 13 in the income tax department and urge them to calculate his capital gains. Filing the form is somewhat harder and the seller would opt for the services of the chartered accountant to furnish the application within the income tax department.
The seller’s capital gains would get calculated by the income tax department and would provide the certificate for nil or lower deduction of the TDS relying on the capital gains which come from the property sale.
The seller is needed to furnish the same certificate to the buyer and the buyer would deduct the TDS under the rates given in the income tax certificate.
Towards the case, this certificate is not taken via the seller from the income tax department. The TDS must be deducted from the total sale price and not from the capital gains. Thus it is crucial for the seller to get the certificate from the income tax officer.
The same is recommended that the details of the TDS deducted be written in the property sale agreement. The same must be noted that it is not the obligation of the property registrar to make sure that the TDS has been deducted. The registrar will enrol the sale agreement even if the TDS does not get deducted or deducted incorrectly.
If the TDS deducted is incorrect or not deducted then the income tax department does not execute anything towards the seller but would grab hold of the buyer of a property to deposit the TDS. if the purchaser loses to deduct the TDS or less deducted TDS then from the buyer the income tax department shall retrieve the TDS.
TDS Payment, Return and TAN Number for NRI
There are various compliances to opt for when buying a property from NRI. initially, the buyer must hold a TAN no for the deduction of TDS. TAN No is not needed towards the case the property is bought from the resident Indian, however, is essential towards the case the property is bought from the non-resident Indian.
TAN no pointed towards the Tax deduction and collection account no and varies from PAN no. Only the purchaser is needed to pose this TAN no while the seller doesn’t. When the buyer has the TAN no then he must apply towards that prior to the TDS deduction. The same is essential to know that towards the case of 2 buyers who need to apply for TAN No.
In 7 days from the finish of the month, the TDS has been deducted by the buyer would be deposited in the Income Tax Department. For instance when TDS gets deducted in June month then TDS must be deposited to the Income-tax Department on or prior to 7th July.
TDS is needed to be deposited including with the Challan No./ ITNS 281 as well as could be deposited online and via different bank branches. The TDS could be deposited online via the same link https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp.
Post depositing the TDS the buyer is needed to file the TDS return. The same TDS return is needed to be filed in Form 27Q and is needed to be filed individually for every quarter where the TDS gets deducted. The same TDS return is needed to get deposited under 31 days from the quarter end where the TDS gets deducted.
Post depositing the TDS and furnishing the TDS return the buyer also needed to file the Form 16A to the seller of the property.
How to Easily Find Out the Seller is Resident or Non-Resident?
Finding out the residential status of the seller is an essential thing to execute during performing the property transaction with NRI as the TDS rate to be deducted relies on whether the seller is a resident or NRI in India for income tax purposes.
The same depends on the number of days an individual spends in India which shall be revealed if the seller is resident in India or a non-resident Indian.
By using a residential status calculator made by the Income Tax Department the residential status of the seller would be determined which would be accessed from here: https://www.incometaxindia.gov.in/Pages/tools/residential-status-calculator.aspx
Essential points to follow during finding out whether the seller is a resident or NRI
- Countries’ citizenship does not matter during finding out if the seller is a resident or non-resident in India. When an individual is a citizen of India but lives in a foreign country he will be recognized as a non-resident for income tax purposes. The Income Tax Act does not discuss citizenship it only reveals the number of days spent in India.
- If the seller owns an Indian Aadhaar card and PAN card he would still recognize as a non-resident in India.
- The number of days spent in India reveals the residential status of the person and it does not reveal on the grounds of the Aadhaar Card or PAN Card. The type of bank account of the seller does not have any influence on the residential status of the seller. If the person does not convert his resident savings account to an NRI bank account he would still be acknowledged as a non-resident.
What if the Seller Mentions that He is a Resident in India?
The major advantage of becoming a non-resident is that the NRI who earns income from foreign does not need to pay the tax in India. But if the foreign income obtained by the resident from outside India gets taxed in India.
The same is the major reason why people living outside India attempt to maintain their NRI status if they become residents in India, they need to pay the tax in India on the earned income from outside India.
The Seller Needs to Take Care
Mentioned are the points that must be remembered by the seller towards the deduction of TDS on a property sale by NRI
- Attempt to obtain the certificate from the income tax department to calculate the capital gains that would diminish the TDS to be deducted.
- Various documents such as Purchase Price, Date of Purchase, any expenses on Renovation/ Construction, and others need to be submitted including Form 13. The income tax officer would review these documents and if he accepted then he would provide a certificate for the lesser TDS deduction.
- When the seller is not able to get the certificate then the TDS shall be deducted from the sale value and will be rendered towards the surplus deduction of TDS.
- On the other side, for the Property Registration Documents, the seller must collect Form 16A from the Buyer.
- The seller would lower his capital gains that pointed towards the lower TDS and the tax liability if the seller has the intention to reinvest in the capital gains in India.
- If the seller does not choose this certificate then he would indeed apply towards the refund of the surplus TDS deducted during the finish of the year.
- If there are two sellers that are co-owners then both of them shall be needed to furnish Form 13 respectively to diminish the TDS cost.
- The compliance of the lower TDS certificate (Form 16) is applicable for both NRI and OCI cardholders and the advantage would also be enjoyed by the OCI cardholders.
Compliance to Know by the Buyer
When the buyer buys the property he has various responsibilities if he buys it from NRI. buyer must have:
- Deduct the TDS during the time of every payment and not during the Registration of Property.
- TDS that gets deducted would get deposited with the income tax department under the schedule towards depositing the TDS.
- TDS return would indeed be filed with the income tax department under the schedule towards furnishing the TDS return.
- The purchaser would indeed provide Form 16A to the seller post to furnish the TDS return. Form 16A undergoes a TDS certificate that mentions that the buyer has deposited TDS with the seller.
- The concern is that if the late TDS payment is furnished then the interest levied will be 1%/1.5% per month.
- Towards the case when the late filing of a TDS return is furnished Rs 200 penalty would be imposed. The income tax officer imposes a penalty of up to Rs 1 lakh.
- Towards the concern of a Home loan, the TDS is to be deducted when the payment is furnished to the seller excluding when EMI gets furnished to the bank.
- TDS gets deducted under the mentioned above schedule on the advance payment. TDS under the mentioned schedule is subjected to apply on all the payments furnished prior to providing the lesser TDS certificate.
How to Avoid Double Taxation on Property Sale by NRI in 2 Countries?
Various countries levied tax on a property sale by their residents no matter where the property is located. For instance, if an NRI in the US sold the property in India then both US and India will impose a tax on the same transaction. The US would impose the tax as the NRI lives in the US and India would impose the tax due to the reason that the seller’s property is in India which renders for double taxation.
But to prevent the double tax India has opted for the Double Taxation Avoidance Agreements with various countries. These agreements mentioned that if an individual furnishes the tax on property sale in India then he would obtain the tax credit of the furnished taxes that would diminish the tax liability in the other country.
Effective disclosure is needed to be furnished towards the case in the country in which the tax credit has been claimed. For example, if you are an NRI in the US and then you sell property in India then you will be needed to declare these gains or losses on the property sale in your US tax return beneath Section D of Form 1040. As India poses a double taxation avoidance agreement with the United States on giving the taxes to the US Government one would deduct the taxes furnished in India.
Money Repatriation by NRI Outside India
To repatriate the money outside India obtained from property sales in India, the NRI needs to submit Form 15CA & Form 15CB to the Bank. the same forms need to be made from the income tax website and then furnished to the bank.
NRI might generate Form 15CA himself or his CA will do it for him but Form 15CB would only be made by the CA. A sign and stamp are also needed in Form 15CB.
In the same forms, different circulation along with the fund source is to be repatriated including the declaration that all the taxes furnished on these funds are in India.
NRIs are permitted to repatriate a maximum of $1 Million (USD) outside India per calendar year. (Refer: RBI Circular)
Diminish TDS Liability via Furnishing the Application in Form 13
To diminish TDS on a property sale by NRI he is needed to furnish the application in Form 13 within the income tax department to provide the certificate for Nil/ Lower Deduction of TDS. the same certificate assists the NRIs in diminishing the TDS liability, and then most NRIs choose the same certificate.
But furnishing the form is a tough chore and thus the majority of NRIs opt for the chartered accountant to furnish the application.
Please clarify that Surcharge on TDS u/s. 195 because we have filed form 27 for the first quarter of F Y 24-25 The total TDS we have deducted 23.92% where as Traces send a notice that we have short deduction and Total TDS they considered 26% ( IT 20% SC 25% & on both E Cess 4%) where the sale consideration is Rs.4.50 crores. your reply is really helpful for us so that we will resolve this issue as per your suggestion.
Surcharges and education cess must be added to the TDS rates provided by the Act.
I am buying for value Rs. 3.51 Crores from NRI, has the TDS rate reduced from 20% to 12.5% in recent budget dated 23 July 2024 ?, How much TDS, Surcharge and Cess will be applicable to be deducted by me, and also which Long Term Capital gain section will be applicable for me to select while filling Form 27Q for submitting TDS returns, Please guide
It is not difficult to fill the information required in Form 13. What proves difficult is to get the Form 13 back from the Assessing officer in a reasonable time as it is a discretionary process and the AO will ask questions on matters which are already included in Form 13 which delays the whole process. You definitely need a CA to push this part along as it is not possible for the NRI to be present in India
Is there a change in TDS rate while buying a flat from NRI in 2024 budget?
No change in TDS rate while buying a flat from NRI in 2024 budget.
According to you blog, citizenship does not come into the picture to determine tax residency in India. So if a OCI holder were to qualify as being resident in india in a particular year and decides to sell his property, would the buyer be correct in deducting only 1% as TDS ?
Also, how do you determine Residency status, for a OCI holder who decides to sell his property on April 20th of a particular year, say 2023. How do you determine his residency ? Does the buyer determine if he was resident in 2022 , and then deduct TDS accordingly or does the buyer look at the total number of days he was in india in 2022 and 2023 ? The amount of days resident in FY 2023 is too short to calculate residency. thanks !
If Overseas Citizen has stayed in India for more than 182 days during a financial year or for a total of 365 days within the preceding four financial years and at least 60 days in the previous financial year, they will be regarded as an Indian resident for tax purpose. TDS rate is based upon the residency status.
Is it mandatory to pay the TDS before the registration of flat if buying from NRI?
My CA is telling me that registrar will not register without acknowledgement receipt that TDS was paid
NRI selling property in Goa inherited via family auction. Was indian resident at the time of inheritance. Has spent min 30days per year in India since for last 10years. Is TDS calculated at 1% or 15%?
If NRI sell property in India TDS rate depend upon capital gain if long term capital gain then TDS rate is 20% and if short term capital gain then income tax slab rate of seller.
In long term how much edu, health and cess will be charge for nri if i sell property amount of 7.53 cr..
when property purchase from nri and NRI has zero atx certificate so who tds deducted us195 and there is any requirment for deduct TDS even if zero tds certificate obtained by NRI
There is no requirement to deduct TDS if zero TDS certificate obtained by NRI.
We are purchasing an agricultural property from an NRI (residing more than 183 days in the last financial year) for a consideration above 50 lakhs. Is TDS of 20% applicable for agricultural property ? Do we need to obtain TAN for this ?
Me and my wife (Co/Applicant/House wife) is buying a property less than 50 L from a NRI through home loan:
1. Do we both have to open 2 TAN account separately for each of us or it is not required as I am the one who is paying
2. If 2 different TAN is required what shall be the % of TDS.
3. As Bank is paying 80%, we will not be paying any amount to seller, shall we only deposit TDS
Amount paid for sale of immovable property to NRI was on 5.Jun.23
TDS deducted is on 21.Feb.24
TDS deposited is on 21.Feb.24
In this case, Should i file for Q1 or Q4?
I am aware that i need to pay late deduction interest of 1%, please tell me which date (payment/deducted) to be considered for assigning the Quarter.
Thanks in advance
Interest will be calculate from the date when payment is made i.e. 5 June 2023 and return will be file in first quarter.
Thanks for the response.
Seller had provided me a lower TDS certificate (197), I had mentioned the same while filing 27Q. Now i am trying to do the correction of filed return to modify deductee details in order to update the ‘Date of Deduction’, getting a message “Certificate is fully consumed. Please check consumption status of certificate before furnishing certificate details in TDS statements to avoid any defaults” when Lower TDS certificate(197) number is entered.
In case if i dont provide the 197 number then i may get default as ITD will consider higher deduction rate.
Please guide me on how to proceed further and update date of deduction.
Excellent Write-up and author sense the responsibility of both NRI seller and resident buyer. Thank you very much for such informative article.
The seller is NRI.
she made her father as general power of attorney (GPA) Holder.
He (GPA Holder) sold the land and registered to buyer.
Buyer deducted 1% Tds for sale consideration of rupees ₹ 60,00,000
Sale proceeds is sent to bank account which is in india.
Is it correct if buyer deduct 1% Tds in form 26QB as resident.
“As per section 194IA of Income Tax Act, a buyer is required to deduct TDS at the rate of 1% of the sale consideration. This is applicable if the value of the payment is Rs. 50 lakh or more. The Section covers residential property, commercial property, as well as land.”
What will be the TDS rates for following treansactions.
a. NRI Son holding property with his father who is indian resident more than 5 years
b. agreement between rs 50 lacs to 1 Cr
c. holding ration NRI Son 50% and Resident father 50%
d. Buyer is Indian resident
Regards
Akshay Salvi
As an NRI, if you sell a property in India, the buyer deducts 20% as Tax Deducted at Source (TDS) as Long Term Capital Gains Tax for properties sold after two years. For properties sold before 2 years, the TDS rate is 30%, deducted as Short Term Capital Gains Tax. If the seller is a resident Indian then the amount of the TDS to get deducted will be 1% of the sale price.
Purchased property from NRI for Rs 1,16,00,000.( 2 Sellers)
Seller shared LDC with 5,49,750 for each seller.
Deposited tax of 5,49,750 with IT department for both sellers. Transaction complete in the month of July.
Now in November I got notice from IT department asking for additional tds deduction of Rs 1,65,000.
I deducted tax based on LDC but on contacting customer care they are saying i should have deducted surcharge and cess on LDC amount.
How can i deduct tax after 4 months of property purchase, seller is NRI and unreachable. What is the way I can solve this?
Planning to buy a property from NRI who purchased a under construction flat from a builder for 65 lakh & registered the same in 2023 February. Now he is selling the same to me & property will get registered in 2024 March. He is also trying to obtain Form-13 . I have two questions.
1. If the property is registered in f.y 24-25 will the form 13 which he obtains will still be valid which he must have obtained for fy.23-24.
2. Does this transaction attracts long term capital gain or short term capital gain.
If a NRI property seller personally visits India and sell his property by hiding his NRI status with the buyer by opening ordinary saving account using only Aadhar card and PAN card and makes deal with Indian buyer, how the buyer can defend his deal about payable TDS of 22.68% with the IT dept. If the NRI seller pays only 1% then whether the same NRI seller is liable to pay 22.68% capital gain tax on the property for the amount deposited in the ordinary saving account.
As a buyer of a property I need to know the sequence of procedure, and in which order the below should be done as there are conflicting opinions on whether the buyers need to be paid before signing or after and when exactly the tds needs to be deposited.
Signing of sale agreement at lawyers office.
Transferring sale price to buyers bank account.
Depositing tds with govt, filing for tds in form 27Q and getting form 16A to give to buyer
There are four legal heirs, (all NRIs – 1 in Australia, 1 in Canada and 2 in USA) of flat that I am, salaried government employee buying at Rs. 1.28 Crores. I am taking a loan from a bank.
Paid an advance of Rs 1 lackh on 03 Aug 23. TDS was not deducted on this.
Total share of each of the above legal heir comes to Rs. 32 Lakhs (less than 50 Lakhs)
Following are my questions:
a) How much TDS is to deducted by from each of the legal heirs
b) Do i have to get a TAN or since, i am a salaried employee, can indicate my PAN no
c) How do I deduct TDS for the advance that i Have taken on 03 Aug 23
Dear Arpit / SAG team,
Kudos for posting such a valuable information in your blog. I am already exploring the products I can buy from your store. I need a quick guidance at the moment on a property sale. The buyer’s CA has filed the TDS with wrong residence type. My parents are residents of India but the CA has submitted the TDS form with NRI status. Due to this error, my parents have received a notice from income tax to file the remaining dues as per NRI TDS rates. Do you know if the residency status could be corrected on the submitted TDS form ? otherwise whats the best process to have this error fixed ?
Thanks a lot in advance for your guidance on this.
What if the seller doesn’t declare that she’s NRI even though based on the days spent by her in India she should be NRI. Will there be any future implications for the buyer as he’s deducting the required TDS of 1%. There are two owners here, the other person is resident Indian.
Thank You for the informative article
Kindly Clarify my query;
One NRI has Sold me two Properties one the Sale Consideration is Rs.30 Lakkhs ; for which TDS is to be deducted at 20.8%
The Same NRI Seller Sold me another Property ; The Sale Consisderation is Rs.60 Lakhs ; for which TDS is to be Deducted at 22.88% ( surcharge @10% ; since Sale Consideration is In the Range of 50 Lakhs to 1 Crore )
In the above Case ; whether I want to Deduct TDS by Transaction wise or else i Have to Consider Party wise and Deduct TDS @ 22,88% for 90 Lakhs
I am an NRI Owner
Property under consideration was purchased March 2011 at 1.38Cr
Project Sale Price is 4cr in late 2023
Indexed Value seems to be 2.84 cr
Profit on Indexed Value seems to be around 1.16 Cr
Does Buyer need to withold and file TDS for 23.92% of 4cr
OR
Does Buyer need to withold and file TDS for 23.92% of 1.16Cr
How can Lower Tax/Form 13 filing help?
When should this be filed?
When should 54EC investment be done to save on Capital gain.?
Does the 54EC Invest ment impact TDS?
TDS is applicable on sale consideration Value. If your income included capital gain is lower from tax limit you can file form 13 and if authority is approve, you can get lower rate of deduction of TDS, and you can get benefit of indexing year is considered F.Y. 2022-23/F.Y. 2010-11, after sale you invest within 6 month 54EC in specific bond you can get benefit but lock in period is 5 Year for sale of bond. and investing in 54EC not effected in you TDS deducted Liability it only save your tax liability. and any other detail please contact any practicing C.A.
A buyer has paid purchase cost in accounting year 2021-22. And agreement also registered for property in accounting year 2021-22. Now remaining payment towards purchase of flat made in accounting year 2022-23 when his loan was processed , now he deducted and filed tds return also. But tds amount is seen in two financial year . Now when NRI who is the seller of flat while filing his return of income getting defect notice from the department as in accounting year 2022-23 he has not shown the capital gain and tds amount is seen , and he has claimed tds as refund. The point is the seller has already shown capital gain in accounting year 2021-22 when sale deed was registered. Now what is the solution.
You can personally visit to department to meet the assessing officer who has issued the notice to you.
I wish to buy a flat from an NRI where the sale considerstion is less than 40 lakhs. He is holding the property for more than 10 years.
Kindly enlighten me about the tax implications including TDS which normally the buyer should look into.
I would also like to know the implications when the NRI is a UK or USA citizen. Whether any RBI prior sanction is required?
Jimmy P K
16th August 2023
If buy property from NRI TDS is required to deduct without any threshold limit. TDS on long term capital gain is required 20%, taxable as capital gain in India. He can get exemption under sec 54, sec 54EC and sec 54 F to reinvest the amount of capital gain. and no prior sanction is required from RBI.
let’s say a NRI owned a property (Residential Land) for about 18 months and sold the property and made X amount profit, it is clearly Short-Term Capital Gain and can the NRI use the same gain towards another purchase of residential property to avoid taxation. I know for residents of India, Section 54 is not applicable, is it that same for NRI’s too ?
Yes for the short term capital gain sec 54 not available for both NRI and resident person. NRI also get exemption for reinvesting of long term capital gain in India under Sec 54, Sec 54 EC and Sec 54F.
Kindly update the article as per budget 2022. Maximum surcharge has been levied has been capped at 15 % irrespective of property value . Applicable from 1st April 2022.
when a buyer is purchasing property from a OCI , Buyer must pay TDS amount through TAN?
also if there are 3 buyers for the property, all need to have TAN?
Also on Seller side property is owned by 2 people, so TDS need to be filled half / half on each one’s PAN ?, please comment , its urgent
If purchasing property from a OCI, Buyer might be required deducted TDS under section 195, TDS can be deducted on a one TAN No. behalf multiple buyer, but if the In the case of joint ownership of the property by two sellers, The TDS amount can be deducted and remitted separately against each seller’s PAN in their ratio.
Please let me know where does these surcharge information for NRI TDS on property sale proceeds is available, any circular ?
TWO NRI, SELLERS (BOTH HUSBAND & WIFE) SALE A PROPERTY TO BUYERS. BUT BUYER DEDCTED AND DEPOSITED TAX AGAINST FULL PROPERTY VALUE, AGAINST ONE SELLER. THIS SELLER (CO- OWNER) HOW CALCULATD CAPITAL GAIN TAX AGAINST FULL SALE VALUE.
Whole amount of TDS claimed by only one person whose account credited by TDS otherwise get notice from ITD
If a resident Indian has inherited a property and thereafter he becomes an NRI let’s say after ten years or so and sells that inherited property or so than what would be the
a ) Capital Gain Tax implications?
b ) TDS implications ?
c ) Remittance procedures & amount limitation and would TCS ( Tax collected at Source) be applicable in this case ?
“Please contact to the Practicing Chartered Accountant.”
Hello sir this is very informative but I have one more query – if the property/ land is unregistered and the seller is NRI , the sale is being done to a resident only thru a transfer in the relevant authority ie no registration is not being done with a registrar (as land is unregistered) , will the above rules particularly the TDS dedcution by the buyer (seller is NRI) still be applicable? Pls clarify.
Super article, all important details covered. Look forward to many such useful blogs from you sir
Kind Attention: Mr. Arpit Kulshreshtha,
Greetings,
It is great learning on different essential aspects on sales of Property by a NRI and explained in detail by you.
excellent explanation and beautiful presentation sir
Surcharge rates on Long term capital gains tax needs to be updated as those mentioned in the article refer to period before 01 April 2022
Well explained article exhaustive and elaborate. While the buyer of the property is deducting TAN is required. It takes about a month which will affect the deduction and payment of taxes. Further Tan obtained by buyer for a single transaction will be in futile after that.
Excellent and very detailed step by step information like spoon feeding. Hats off to Mr Arpit.
I finalise to buy a flat which was bought in Sept, 2011 by husband and wife wo happened to be NRIs. Sale consideration is Rs.38 lacs. I go for bank home loan and sale will be registered with my wife. Kindly advise how to deal with the TDS. The owners agreed for deduction of TDS@20.8%. Pl guide me the steps to be followed to deal with TDS.
When a person purchases immovable property from NRI then he is liable to deduct TDS on entire sale consideration ‘without any threshold limit. and if the property held more than 2 year TDS rate is applicable 20%.
I purchase a resale flat of 11 yrs old for Rs.38 L . Am I correct in mentioning Rs.790400- as TDS to be deducted in sale agreement. Pl guide
I am also in a similar situation. When buyer is taking a home loan, and seller has provided him certificate for low rate of tax deduction, how to proceed with tax deduction, as payment to seller is directly coming from the bank itself..?