Applicable TDS for Purchase of Flat from NRI
This query is : Resolved
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11 July 2026
Subject: Guidance required on TDS under Section 195 for purchase of flat from NRI sellers
I am purchasing a residential flat in Kolkata from two NRI sellers (husband and wife), each holding a 50% share.
Details:
- Total sale consideration: ₹44,00,000
- Sellers purchased the flat in 2010 for approximately ₹25,00,000.
- Registration is planned for 29 July 2026.
- We (buyers) have already obtained TAN.
- I am purchasing the property with a home loan.
- The sellers have not provided any Lower/Nil TDS Certificate from the Income Tax Department.
I need guidance on the following:
1. How should TDS under Section 195 be calculated in this case?
2. Should TDS be deducted on the entire sale consideration or only on the estimated capital gains?
3. What TDS rate is applicable if the sellers do not provide a Lower/Nil Deduction Certificate?
4. Is surcharge and health & education cess applicable? If yes, how should the final TDS be computed?
5. Since there are two sellers with equal shares, should separate Form 27Q returns and separate Form 16A certificates be filed for each seller?
6. What documents should the buyer collect from the sellers to avoid any future tax liability?
7. Since a home loan is involved, what instructions should be given to the bank regarding release of the loan amount after deducting TDS?
8. Section 195 or Section 393 which one is applicable?
I would appreciate a detailed calculation and practical guidance to ensure full compliance.
Subject: Guidance required on TDS under Section 195 for purchase of flat from NRI sellers
I am purchasing a residential flat in Kolkata from two NRI sellers (husband and wife), each holding a 50% share.
Details:
- Total sale consideration: ₹44,00,000
- Sellers purchased the flat in 2010 for approximately ₹25,00,000.
- Registration is planned for 29 July 2026.
- We (buyers) have already obtained TAN.
- I am purchasing the property with a home loan.
- The sellers have not provided any Lower/Nil TDS Certificate from the Income Tax Department.
I need guidance on the following:
1. How should TDS under Section 195 be calculated in this case?
2. Should TDS be deducted on the entire sale consideration or only on the estimated capital gains?
3. What TDS rate is applicable if the sellers do not provide a Lower/Nil Deduction Certificate?
4. Is surcharge and health & education cess applicable? If yes, how should the final TDS be computed?
5. Since there are two sellers with equal shares, should separate Form 27Q returns and separate Form 16A certificates be filed for each seller?
6. What documents should the buyer collect from the sellers to avoid any future tax liability?
7. Since a home loan is involved, what instructions should be given to the bank regarding release of the loan amount after deducting TDS?
8. Section 195 or Section 393 which one is applicable?
I would appreciate a detailed calculation and practical guidance to ensure full compliance.
11 July 2026
1. Section 393 directly replaces the legacy Section 195. It mandates that any resident individual buying property from a non-resident must deduct tax at source on capital gains or the total consideration.
2. TDS should be deducted over total sale consideration of 44 lakhs.
3. TDS rate would be 12.5% + 4% cess... Effective rate 13%.
4. Surcharge not applicable if value below 50 lakhs. You will pay the NRI seller ₹38,28,000 and deposit the ₹5,72,000 directly with the Income Tax Department.
5. Yes. File the quarterly TDS return using Form 144 (which replaces the old Form 27Q). Form 131 (the updated Form 16A) to the NRI seller within 15 days of filing your return.
6. PAN of both the sellers.
7. Generally bank do not obliged for TDS deduction, so better to deduct total TDS at first instance itself.
8. Section 393 IT act, 2025.
2. TDS should be deducted over total sale consideration of 44 lakhs.
3. TDS rate would be 12.5% + 4% cess... Effective rate 13%.
4. Surcharge not applicable if value below 50 lakhs. You will pay the NRI seller ₹38,28,000 and deposit the ₹5,72,000 directly with the Income Tax Department.
5. Yes. File the quarterly TDS return using Form 144 (which replaces the old Form 27Q). Form 131 (the updated Form 16A) to the NRI seller within 15 days of filing your return.
6. PAN of both the sellers.
7. Generally bank do not obliged for TDS deduction, so better to deduct total TDS at first instance itself.
8. Section 393 IT act, 2025.
11 July 2026
Thank you very much Sir for your help
11 July 2026
My pleasure .....
11 July 2026
Can you please mention the section no, table no or exactly the phrase which describes the TDS for buying flat from any NRI. They are having aadhar card, PAN card and Passport of India and are still Indian Citizens
12 July 2026
Check whether they are NRI first...
https://www.incometaxindia.gov.in/w/residential-status
If NRI...
1. https://www.dbs.bank.in/in/treasures/articles/nri-hub/live-enriched/tds-on-purchase-of-property-from-nri-india
2. https://caalokkumar.com/my-writing/nri-property-seller-tds-tan-form-144-form-145-146-guide/
https://www.incometaxindia.gov.in/w/residential-status
If NRI...
1. https://www.dbs.bank.in/in/treasures/articles/nri-hub/live-enriched/tds-on-purchase-of-property-from-nri-india
2. https://caalokkumar.com/my-writing/nri-property-seller-tds-tan-form-144-form-145-146-guide/
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