Tds deduction from nri
This query is : Resolved
08 December 2011
One NRI Mr. A is selling his Immovable properties to Mr. B and Mr. C and the registration deeds will be signed in March 2012 and June 2012 respectively. Both the buyers are going to deduct TDS @ 30% on the entire sale consideration. Please guide me-
1) That they are right in deducting TDS @ 30% on the Sale Consideration or should deduct on Capital Gain.
2) That the seller Mr. A will be suffering long term Capital Loss in the both the deals.
3) The procedure for obtaining No TDS deduction certificate from Income Tax department whether to apply in Form 13 or in Form 15D.
4) Where to apply for Non TDS Deduction Certificate – whether to Assessing Officer having jurisdiction or to ITO (TDS).
URGENT.
1) That they are right in deducting TDS @ 30% on the Sale Consideration or should deduct on Capital Gain.
2) That the seller Mr. A will be suffering long term Capital Loss in the both the deals.
3) The procedure for obtaining No TDS deduction certificate from Income Tax department whether to apply in Form 13 or in Form 15D.
4) Where to apply for Non TDS Deduction Certificate – whether to Assessing Officer having jurisdiction or to ITO (TDS).
URGENT.
08 December 2011
Form-15 D by NRI in case of any receipt other than interest and dividend.Form 15CA and 15CB by the payers for non deduction of tax on foreign remittances.
Guest
Guest
(Expert)
09 December 2011
TDS as per Section 115G of Chapter XII of the Income Tax Act is applicable.
09 December 2011
Where to file Form 15-D -with assessing officer having jurisdiction or with ITO (TDS)
27 July 2025
Here’s a clear and concise guidance on your queries regarding TDS deduction from an NRI on sale of immovable property:
---
### 1) **TDS Deduction Rate on Sale Consideration by NRI Buyers**
* The buyers **should deduct TDS not on the entire sale consideration but on the capital gains arising from the sale**, as per **Section 195** read with **Section 48**.
* However, **in practice, the buyer deducts TDS at 20% (plus applicable surcharge and cess) on the entire sale consideration** under **Section 195** to cover the capital gains tax liability.
* The applicable rate for long-term capital gains on immovable property by NRI is **20% (with indexation benefits)**, not 30%.
* The 30% rate applies generally to other income types for NRIs, but not capital gains on property.
---
### 2) **Capital Loss Situation for Seller**
* If Mr. A is indeed suffering a **long-term capital loss**, this will not affect TDS deduction upfront.
* The **buyer has to deduct TDS regardless of capital gain or loss** because the seller’s actual capital gain/loss is assessed later by the tax authorities.
* The NRI seller can claim the capital loss or capital gain upon filing the income tax return in India.
---
### 3) **Procedure for Obtaining No TDS Deduction Certificate**
* The NRI seller can apply for a **"No TDS Deduction Certificate" or lower deduction certificate** from the **Income Tax Department** under **Section 195(2)**.
* The application is made by filing **Form 13** to the Assessing Officer (AO).
* This certificate allows the buyer to deduct lower or no tax at source on the transaction.
---
### 4) **Where to Apply for the Certificate**
* The application in Form 13 should be submitted to the **Assessing Officer having jurisdiction over the seller (NRI)**.
* It is **not filed with the TDS officer (ITO (TDS))** but with the AO who is responsible for the seller's income tax assessments.
---
### Additional Notes:
* Buyers also have to comply with **Form 15CA and 15CB** (certificate from Chartered Accountant) when making payments to NRIs.
* Form 15D is typically for **income other than interest and dividend**, filed by the NRI for no or lower deduction of tax, but for property transactions Form 13 is the correct form for lower/no deduction certificate.
---
If you want, I can also provide sample drafts for Form 13 applications or help with further clarifications.
Would that help?
---
### 1) **TDS Deduction Rate on Sale Consideration by NRI Buyers**
* The buyers **should deduct TDS not on the entire sale consideration but on the capital gains arising from the sale**, as per **Section 195** read with **Section 48**.
* However, **in practice, the buyer deducts TDS at 20% (plus applicable surcharge and cess) on the entire sale consideration** under **Section 195** to cover the capital gains tax liability.
* The applicable rate for long-term capital gains on immovable property by NRI is **20% (with indexation benefits)**, not 30%.
* The 30% rate applies generally to other income types for NRIs, but not capital gains on property.
---
### 2) **Capital Loss Situation for Seller**
* If Mr. A is indeed suffering a **long-term capital loss**, this will not affect TDS deduction upfront.
* The **buyer has to deduct TDS regardless of capital gain or loss** because the seller’s actual capital gain/loss is assessed later by the tax authorities.
* The NRI seller can claim the capital loss or capital gain upon filing the income tax return in India.
---
### 3) **Procedure for Obtaining No TDS Deduction Certificate**
* The NRI seller can apply for a **"No TDS Deduction Certificate" or lower deduction certificate** from the **Income Tax Department** under **Section 195(2)**.
* The application is made by filing **Form 13** to the Assessing Officer (AO).
* This certificate allows the buyer to deduct lower or no tax at source on the transaction.
---
### 4) **Where to Apply for the Certificate**
* The application in Form 13 should be submitted to the **Assessing Officer having jurisdiction over the seller (NRI)**.
* It is **not filed with the TDS officer (ITO (TDS))** but with the AO who is responsible for the seller's income tax assessments.
---
### Additional Notes:
* Buyers also have to comply with **Form 15CA and 15CB** (certificate from Chartered Accountant) when making payments to NRIs.
* Form 15D is typically for **income other than interest and dividend**, filed by the NRI for no or lower deduction of tax, but for property transactions Form 13 is the correct form for lower/no deduction certificate.
---
If you want, I can also provide sample drafts for Form 13 applications or help with further clarifications.
Would that help?
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