Clarification on TDS Applicability under Section 195 for NRI Co-owner – Property Transaction
This query is : Resolved
24 March 2026
Dear Sir/Madam,
I would like to seek clarification regarding the applicability and rate of TDS under Section 195 of the Income-tax Act, 1961 in the following case:
A property is proposed to be sold for a total consideration of ₹1,000,000 jointly held by 5 co-owners. One of the co-owners is a Non-Resident Indian (NRI), holding an 20% share in the property, with corresponding sale consideration of Rs 20,00,000. Whether TDS under Section 195 is applicable on the NRI co-owner’s share of ₹2000000, even though the amount is below ₹50,00,000. need to now LTCG % + surcharge %+Cess = ?
I would like to seek clarification regarding the applicability and rate of TDS under Section 195 of the Income-tax Act, 1961 in the following case:
A property is proposed to be sold for a total consideration of ₹1,000,000 jointly held by 5 co-owners. One of the co-owners is a Non-Resident Indian (NRI), holding an 20% share in the property, with corresponding sale consideration of Rs 20,00,000. Whether TDS under Section 195 is applicable on the NRI co-owner’s share of ₹2000000, even though the amount is below ₹50,00,000. need to now LTCG % + surcharge %+Cess = ?
24 March 2026
TDS under Section 195 is applicable to the NRI co-owner's share, even if the amount is below ₹50,00,000.
The effective tax rates for Long-Term Capital Gains (LTCG) on property sales for NRIs, following updates in the Finance Act 2024, are as follows:
LTCG Tax Rate: 12.5% (without indexation) for properties sold on or after July 23, 2024.
Surcharge: 0% (Nil) for the NRI co-owner's specific share of ₹20,00,000, as it is below the ₹50 lakh surcharge threshold.
Health and Education Cess: 4% (applied on the tax amount).
The effective tax rates for Long-Term Capital Gains (LTCG) on property sales for NRIs, following updates in the Finance Act 2024, are as follows:
LTCG Tax Rate: 12.5% (without indexation) for properties sold on or after July 23, 2024.
Surcharge: 0% (Nil) for the NRI co-owner's specific share of ₹20,00,000, as it is below the ₹50 lakh surcharge threshold.
Health and Education Cess: 4% (applied on the tax amount).
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