Purchase of property from NRI

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If you're looking to purchase property from a Non-Resident Indian (NRI), it's crucial to understand the legalities. The NRI seller must have a PAN card, which can be obtained via Form 49AA. Sale proceeds should be transferred to the NRI's Indian NRO account, not their representative's. As the buyer, you'll need a TAN to deduct TDS under Section 195, which varies based on the holding period, and file the relevant forms. Consider obtaining a lower TDS certificate if the seller's capital gains are expected to be minimal.

Sanjay Budhiraja

Sanjay Budhiraja (Querist)
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09 August 2026 Hello all experts
Pl advise. I want to purchase a property from NRI. He is OCI card holder living in USA but he is not having PAN no and account in India. Is it possible. His mother is a holder of POA to sell. In whose account i shall transfer sale consideration amount. And how much TDS should I deduct after making payment.
Regards

Aashok Kumar Sharma online

Aashok Kumar Sharma

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09 August 2026 PAN is mandatory for the NRI seller — he must apply via Form 49AA (no India visit needed) before the deal, or TDS defaults to a flat 20%+.
Sale money goes to the NRI's own NRO account, not his mother's account — POA lets her sign the deed, not receive the funds.
TDS is under Section 195 (not 194-IA): ~12.5% + surcharge + cess if long-term (>24 months held), or slab rate if short-term — deducted on full sale value.
Buyer needs a TAN, must deposit TDS and file Form 27Q, then issue Form 16A.
If actual capital gain is low, seller should get a Section 197 Lower/Nil TDS certificate beforehand to avoid excess deduction.

Sanjay Budhiraja

Sanjay Budhiraja (Querist)
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09 August 2026 TAN required by buyer before deal or after deal he can apply.