Applicable TDS from british passport holder having OCI card

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Nidhi Kushwaha

23 Points Posted on 04 February 2024

I am purchasing a property from a person who is a british citizen and oci holder.

He is saying that he has travelled to India multiple times 7-8 times this fiscal year and already completed his 182 days in India, albeit cumulative not in one stretch. And I should deduct tds @ 1%.

Is he correct in above statement? Stay period of 182 days in India can be divided among multiple visits ? Or it has to be one stretch ??

Can I ask him to get lower tds certificate from AO/ITO for his 1% tds argument. Kindly guide .

Replies (3)

Quick Summary

This discussion clarifies Tax Deducted at Source (TDS) when purchasing property from a British citizen holding an Overseas Citizen of India (OCI) card. The key question is whether the seller's cumulative stay in India exceeding 182 days makes them a resident for TDS purposes, allowing for a 1% deduction. The consensus suggests that OCI status generally implies Non-Resident Indian (NRI) status for tax purposes, irrespective of the duration of stay. It is advised to confirm the seller's residential status and obtain a lower TDS certificate from the Income Tax Department to avoid liability for the buyer.

Saravanan nagaraj

332 Points Posted on 04 February 2024

Please elaborate some details to give your precise suggestions or guidance.

For how much, did you buy the property?

As far as my concern, TDS on property deducted on the basis of residential status, not how long I have been in the country.

OCI has dual citizenship, he can be in India without any time limit even no need to inform to police officials. He might have declared his residential status as NRI then he could file ITR as NRI only. Not a resident.

Treatment of TDS to NRI.

Short Term Capital Gains - you should deduct on income tax slab wise.

Long term capital Gains - you should deduct 20% tax + Surge 10% above 50 Lakhs + Edu-cess 4% = 22% for above 50 lakhs upto 1 cr.

Exceeded 1 cr, it is 23%

Please ask him to get certificate from concern ITO. Without this certificate, if you deduct TDS lesser amount. Income tax dept leave him and hold you for tax responsibility.

Please consult with your Tax Accountant or Chartered accountant. 🙏 Thanks