Menu

User Menu Advertisement

! » Income Tax » Articles

TDS on Purchase of Property from NRI

" Priyanka Sahu | Income Tax - Articles |

Download PDF $ 30 Nov 2020
% 77,253 Views & 11 comments
When there is a purchase of immovable
property, the buyer needs to deduct tax (TDS)
from the Sale value, pay the balance amount
to the Seller and pay the TDS amount to the
Government.

Advertisement

As per Indian Income Tax Act, where a

resident purchases any property from a Non
Resident, he has to deduct tax and pay the
balance amount to the Nonresident (Seller).

This article provides a brief description

regarding TDS provisions applicable when
there is purchase of immovable property from
a non resident by a resident.

1. Applicable TDS rates – TDS is to be done

as per provisions of Section 195.

2. In case of

Long term Capital Asset – 20% (Full

details given in the below chart)
Short Term Capital Asset – As per
Income Tax Slab rate of Seller (NRI) in
India.

The effective TDS rates in case ‘Long Term

Capital Gain’ is calculated below:

Particulars Effective TDS r

Income is less than IN

Long Term Capital Gain Tax Rate 20%

Add – Surcharge 0%

Total Tax including surcharge 20%

Add – Health and education cess 4%

Effective TDS Rates 20.80%

The surcharges shall be subject to marginal

relief.

2. LOWER RATE OF TDS

Advertisement

There is also provision to deduct TDS at lower

rate in case of purchase of property from NRI
for which the following steps need to be
followed:

The seller (NRI) is required to apply for a

lower TDS deduction from the
Jurisdictional Assessing officer of Income
Tax.
The Assessing Officer shall issue a
Lower rate TDS deduction certificate
within a period of 30 days.
Based on the Certificate the buyer is
required to deduct TDS as mentioned in
the Certificate.

3. AMOUNT ON WHICH TDS IS TO BE

DEDUCTED

This depends on two situations

1. When the Seller has obtained certificate of

Lower deduction of TDS, following process
needs to be done:

The seller shall apply for Computation of

Capital Gain to Income Tax Officer.
Based on the documents provided, the
Income tax officer shall compute the
Capital gains of the Seller.
The Capital gain so computed by the
Income Tax Officer shall be intimated to
the Seller by way of a Certificate.
The seller needs to submit the certificate
of Lower Deduction of TDS to the buyer.
On the basis of the above certificate, the
buyer would deduct TDS on the Capital
Gain so computed by the Income Tax
Officer.

1. When the seller has not obtained the

certificate of Lower deduction of TDS:

In this case the TDS is to be deducted on the

total Sale Price instead of Capital Gain. So it
is very important for the seller to obtain the
Certificate from the Income Tax officer to
lessen the Tax burden.

Be a Climate Risk Champion

Drive your organization’s climate
strategy forward by earning your
SCR Certi;cate.

Advertisement

4. TIME OF DEDUTION

Earlier of the Following:

1. At the time of payment ; or

2. At the time of credit of income.

5. TDS Payment and Return

The buyer is required to deposit the TDS

with Govt. within 7 days from the end of
the month in which the TDS has been
deducted. (Challan No – 281)
The buyer is required to submit the TDS
return in Form 27Q.

Quarter Quarterly Return- Due Date TDS Certificat

Apr-June 31st July 15th August

July- Sep 31st Oct 15th Novembe

Oct- Dec 31st January 15th February

Jan- Mar 31st May 15th June

Notes: A) In this case It is mandatory for the

buyer to obtain TAN (Tax Deduction And
Collection Number).

Boost your job

search with us

Sign Up
Advertisement

B) The seller (NRI) can avail exemption

benefits on Long term capital gain under
section 54 and section 54EC.

C) To repatriate the money outside India, the

NRI would also be required to submit Form
15CA & Form 15CB to the Bank. These forms
are required to be generated from the Income
Tax Website and then submitted to the Bank.

D) Form 15CA may be generated by the NRI

himself or by his Chartered Accountant but
Form 15CB can only be generated by a
Chartered Accountant. The Chartered
Accountant is also required to sign and stamp
the Form 15CB

E) The applicable interest provisions for non-

deduction or non-payment of TDS is explained
here under –

Particulars

Non-deduction of TDS (either wholly or partly)

TDS deducted, however, not deposited (either wholly or par

Advertisement

Tags: TDS

Advertisement

Kindly Refer to Privacy Policy & Complete Terms of

Use and Disclaimer.

Author Bio

Name: Priyanka Sahu

Qualification: CA in Practice
Company: Priyanka Sahu & Co
Location: Berhampur, Odisha, IN
Member Since: 28 Jul 2020 | Total Posts: 16

View Full Profile

My Published Posts
Exemption available for educational institutions-
Section 10(23C) & 11
Charitable Institutions- Registration U/s. 12AB of
Income Tax Act
Section 80E: Tax benefit for Interest on Loan
taken for Higher Education
Section 54EC – Exemption on Long Term Capital
Gain
Section 194O- TDS on Payments to E-commerce
Participants WEF 01.10.2020

View More Published Posts

Join Taxguru’s Network for Latest updates on

Income Tax, GST, Company Law, Corporate
Laws and other related subjects.

Join us on Whatsapp
GROUP LINK

Join us on Telegram
GROUP LINK

Review us on Google

Advertisement

More Under Income Tax

Limitation period of provisional attachment not
extended based on SC order post pandemic

Time limits, based on circumstance, can be

compelling guidelines or mandatory prescription

Set off of brought forward business loss &

unabsorbed dep. not available to ingenuine
demerger

Order, prejudicial to the interest of revenue, set

aside invoking jurisdiction u/s 263

Penalty u/s 271(1)(c) unsustainable on suo moto

reversal of excess depreciation

« Previous Article Next Article »

' 11 Comments
Kalyan says:

If the property value is more than 50 lakhs and the

there are more than 1 nri sellers, how should the
TDS be calculated. For eg 2 nri sellers with 50%
share for a 54lakh property will have be taxed at
22% or 20%?

( March 18, 2022 at 5:58 pm Reply

raj says:

Very well explained

( December 11, 2021 at 2:46 pm Reply

PAUL KP says:

I (Indian) would like to purchase a land from NRI

(Australia). Property in Kerala, India.
a) TDS is applicable and on which rate?

TIN registration is necessary? please explain

which is very helpful to me.

( October 19, 2021 at 1:53 pm Reply

Karan Batra says:

Yes, TAN No. is mandatory if you are

purchasing property from NRI

( February 1, 2022 at 6:55 pm Reply

Kishore says:

What is the income to be considered for TDS

calculation? if the lower tax certificate is not
applicable. Example: sale value is 75L.
so applicable TDS will be 20.8% or 22.88%.
Pls clarify.

( August 3, 2021 at 11:52 am Reply

Karan Batra says:

If the application for reduction of TDS is not

filed, the TDS Rate applicable in this case
would be 22.88%

( February 1, 2022 at 6:56 pm Reply

pramod says:

Nice article. But the main problematic area as

how to obtain certificate for lower deduction has
not been touched at all. Relevant rule and Form
Number has been completely left out. It will be
nice if one more article is posted to explain this
procedure.

( March 11, 2021 at 7:04 pm Reply

Karan Batra says:

File an application in Form 13 for reduction

of TDS under Section 197

( February 1, 2022 at 6:57 pm Reply

Zulfakhar Syed Ameeruddin says:

Very well explained in a simple way.

( December 2, 2020 at 9:32 am Reply

Zulfakhar Syed Ameeruddin says:

Good article !! Very well explained in a simple

way.

( December 2, 2020 at 9:30 am Reply

Karthik R says:

Nice article

( December 1, 2020 at 5:47 pm Reply

Leave a Comment

Your email address will not be published.

Required fields are marked *

" Name *

) Email *

* Website

Comment

Post Comment

Restore
Damaged
Headphones
Fi5y Square Inc.

伸缩率280％。与各种⽿机完美密合。

打开

Advertisement

+ Latest Posts

1. Latest GST Ready Reckoner – 2022 by CA Raman

Singla
2. Join our Courses on GST, Customs, Excel & Income
Tax at 40% Discount
3. IBC (Amendment) Act, 2021 (Comparison with IBC,
2016) Part I
4. Related Party and Related Party Transaction
5. Proceedings concluded due to no tax dues and zero
tax effect
6. Limitation period of provisional attachment not
extended based on SC order post pandemic
7. Time limits, based on circumstance, can be
compelling guidelines or mandatory prescription
8. Set off of brought forward business loss & unabsorbed
dep. not available to ingenuine demerger
9. Revenue needs proper evidence to reject
classification done by assessee
10. Comprehensive changes in FORM GSTR-3B
11. Artificial Intelligence: A Boon to Corporate
Reporting
12. Order, prejudicial to the interest of revenue, set aside
invoking jurisdiction u/s 263

View All Latest Posts

, Popular Posts

1. Corporate Compliance Calendar for July, 2022

2. CGST Act 2017 updated till 06th July 2022- Free E-
Book
3. Extend due dates of Income tax returns from
31.07.2022 to 31.08.2022
4. Third Party Exports & Third Party payment for
exports/Import Transactions
5. Illustrative Clause 44 of Form 3CD Applicable for
Financial Year 2021-22

View All Popular Posts

Advertisement

- Featured Posts

1. Changes proposed in disclosure of ITC in Table 4 of

GSTR-3B
2. Outward Supply additional disclosures in Form GSTR-
3B
3. Brief note on ‘e-proceedings’ and ‘Faceless
Assessment
4. Results of CA Final Examination likely on 16th July,
2022
5. Revised return of income cannot be filed to withdraw
the claim: SC

View All Featured Posts

Advertisement

) NEWSLETTER

Join our newsletter to stay updated on Taxation and

Corporate Law.

Enter your email address

Subscribe Now

( Search Posts by Date

JULY 2022

M T W T F S S

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30 31

« Jun

Advertisement

Ad

QUICK LINKS