Tds on nri property purchase
This query is : Resolved
13 July 2017
I am planning to buy flat from NRI for 1.1 crore in ahmedabad 9 year old. I read on internet that property purchased from nri attract tds of 20.66 percent to be deducted by buyer. However the seller is telling that tds will be 1percent only .Please advise what is the tds to be deducted. Also what are the other formalities required to be done in case of nri property.Thanks
13 July 2017
tax will be deducted as per DTAA which normally is around 20.66%
you need to deduct the TDS, file TDS return etc to comply with the TDS regulations.
you need to deduct the TDS, file TDS return etc to comply with the TDS regulations.
13 July 2017
Conversely ,1% deduction applies if and only if the seller is RESIDENT in India.
24 July 2017
Thanks sir, also can you suggest me good CA in Ahmedabad who can help me out in this procedure.ThanksVikas
24 July 2017
Thanks sir, also can you suggest me good CA in Ahmedabad who can help me out in this procedure.ThanksVikas
24 July 2017
Thanks sir, also can you suggest me good CA in Ahmedabad who can help me out in this procedure.ThanksVikas
24 July 2017
Thanks sir, also can you suggest me good CA in Ahmedabad who can help me out in this procedure.ThanksVikas
24 July 2017
Thanks sir, also can you suggest me good CA in Ahmedabad who can help me out in this procedure.ThanksVikas
27 July 2025
Hey Vikas! Here’s a clear summary for your query on TDS for purchasing property from an NRI:
---
### TDS on Property Purchase from NRI
* **Buyer’s obligation:** When buying immovable property from an NRI, the buyer **must deduct TDS @ 20% + 4% cess = 20.8%** (approx) on the sale consideration as per **Section 195** of the Income Tax Act.
* This is because the NRI seller is a non-resident and the sale proceeds are chargeable to tax in India.
* **The 1% TDS rate applies only if the seller is a resident Indian.** For resident sellers, under Section 194-IA, TDS is 1% on property transactions above Rs. 50 lakh.
* So your seller asking for 1% TDS is incorrect for NRI.
### Other Important Points
* The buyer has to **deduct TDS at the time of making payment** to the NRI seller.
* Buyer must **deposit TDS with the government** and file TDS returns.
* The buyer should obtain **Form 16B** (TDS certificate) and provide it to the seller.
* Seller can later file income tax return and claim credit of TDS deducted.
* It’s advisable to get a **certificate from the seller for lower deduction of TDS** from the Income Tax Department (if seller wants to pay less than 20%).
---
### Other Formalities for NRI Property Purchase
* Check if the property is **purchased through proper power of attorney** or if the NRI is personally executing the sale deed.
* Verify **PAN of the NRI seller** (mandatory for TDS deduction).
* Ensure compliance with **FEMA (Foreign Exchange Management Act)** provisions, especially if payment is made from abroad.
* Buyer can take help from a CA or tax advisor to file TDS returns properly and assist with the entire procedure.
---
### CA Recommendation
I can’t directly recommend specific CAs here, but you can check:
* The **Institute of Chartered Accountants of India (ICAI) website** for a list of members in Ahmedabad.
* Local business directories or online platforms like **Justdial, Sulekha, or UrbanPro** to find reputed CAs specializing in property and NRI taxation.
* Personal referrals always help too!
---
---
### TDS on Property Purchase from NRI
* **Buyer’s obligation:** When buying immovable property from an NRI, the buyer **must deduct TDS @ 20% + 4% cess = 20.8%** (approx) on the sale consideration as per **Section 195** of the Income Tax Act.
* This is because the NRI seller is a non-resident and the sale proceeds are chargeable to tax in India.
* **The 1% TDS rate applies only if the seller is a resident Indian.** For resident sellers, under Section 194-IA, TDS is 1% on property transactions above Rs. 50 lakh.
* So your seller asking for 1% TDS is incorrect for NRI.
### Other Important Points
* The buyer has to **deduct TDS at the time of making payment** to the NRI seller.
* Buyer must **deposit TDS with the government** and file TDS returns.
* The buyer should obtain **Form 16B** (TDS certificate) and provide it to the seller.
* Seller can later file income tax return and claim credit of TDS deducted.
* It’s advisable to get a **certificate from the seller for lower deduction of TDS** from the Income Tax Department (if seller wants to pay less than 20%).
---
### Other Formalities for NRI Property Purchase
* Check if the property is **purchased through proper power of attorney** or if the NRI is personally executing the sale deed.
* Verify **PAN of the NRI seller** (mandatory for TDS deduction).
* Ensure compliance with **FEMA (Foreign Exchange Management Act)** provisions, especially if payment is made from abroad.
* Buyer can take help from a CA or tax advisor to file TDS returns properly and assist with the entire procedure.
---
### CA Recommendation
I can’t directly recommend specific CAs here, but you can check:
* The **Institute of Chartered Accountants of India (ICAI) website** for a list of members in Ahmedabad.
* Local business directories or online platforms like **Justdial, Sulekha, or UrbanPro** to find reputed CAs specializing in property and NRI taxation.
* Personal referrals always help too!
---
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