Tds on property sold by nri

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A foreign citizen, who is an NRI, sold a residential property in Pune for ₹69 lakhs. The buyer incorrectly deducted only 1% TDS, instead of the applicable NRI rate. The seller is seeking advice on how to rectify this TDS shortfall, particularly concerning the timing of payment and potential documentation with the registrar. The discussion clarifies that the remaining TDS difference should be paid promptly, and a correction deed is likely unnecessary. It also highlights the importance of the NRI having an Indian PAN and addresses TDS rates for capital gains.

Sanjiv Chawra

Sanjiv Chawra (Querist)

25 February 2020 My relative is a foreign citizen and has sold a residential property in pune for 69lacs to an in indian citizen in Jan 2020. But the agreement was done by power of attorney, and the buyer had wrongly deducted 1% tds. Now I came to know that he should have deducted as per NRI. Now what should be done. Please suggest.

Amol S Joglekar

Amol S Joglekar (Expert)

25 February 2020 now you can deduct in the month of feb, the difference

Sanjiv Chawra

Sanjiv Chawra (Querist)

25 February 2020 You mean that I should pay the rest 19% tds in this month?
Then do we have to make a correction deed with the registrar?

Amol S Joglekar

Amol S Joglekar (Expert)

25 February 2020 01. why to make correction deed?
02. Is that NRI having indian PAN?

Sanjiv Chawra

Sanjiv Chawra (Querist)

25 February 2020 If we pay 20% tds then the final figure will change in the deed as the buyer had deducted 1% tds.
Yes he was NRI since last 5 years and became a Swedish citizen last year.
Earlier we use file his ITR on Indian pan, but have not filed his last 2 years ITR as he had no income here in India.
Please suggest.

Amol S Joglekar

Amol S Joglekar (Expert)

26 February 2020 Income from long term capital gain... rate of TDS is 10%
https://www.bankbazaar.com/tax/section-195.html
Now you can deduct 9 %.
(If full consideration has been paid, please ask the seller to pay 9%)

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