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.
Comments
7 comments
Hello, I am planning to purchase one property in Kolkata, WB, India from NRI seller.
Actual Sale Price=INR 35,00,000 on Feb 2019
Actual Purchase Price=INR 10,22,200 on 2011
My Queries:
1> Is TDS needs to be deducted on this transaction as property value is less than 50L INR
2> If TDS needs to be deducted, what would be the calculation and TDS amount.
3> Is TDS needs to be calculated on actual sale value or on the capital gain.
Planning to buy property from NRI
Seller is insisting to deduct TDS as per capital gain only
What we should do?
In one of your other blogs, you had mentioned that TAN is not needed for TDS on sale of property. But this post contradicts. We are buying property from NRI. Is TAN mandatory?
very informative blog on NRI lower TDS certificate
Hello Sir, I find this blog very informative and thanks for the information. I am a non resident Indian (OCI). I am planning to sell a property in India to another non-resident Indian (OCI). How will the capital gains tax deduction work when both buyer and seller are NRIs (OCI). Both of us have Pan cards but no Aadhar card as it is not applicable for citizen of other country. Will the buyer although NRI still has to deduct TDS from sale price when buying from a NRI seller.Can you please explain the sale procedure.
Also, can the purchase money translation be done outside India or does it need to be within India only before transferring out of India to the country where I live.
Regards,
Ravi
Thank you for Sharing the information. I learned from it. I appreciate you the detail you went into. I am grateful for the amount of time and effort you put into this helping us. Your insights and summary are beneficial.
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Our Company planning to buy a property from NRI Citizen.How many percentage of TDS should be deducted from seller.And NRI is should to file the return or it not applicable
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