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buying property from NRI

11 January 2019

I am buying a property from NRI for 40 Lakhs. I want to know if any TDS
to be deducted? at what rate?
I was told it.is applicable only 50
lacs value. Please clarify

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2 Replies

Nitesh bind (Student CA Final ) (12692 Points)
Replied 11 January 2019

When purchasing a property from NRI – TDS is required to be deducted on Capital Gains and not on the Sale Price. In case of purchase of property from NRI, TDS under Section 195 is required to be deducted on the Capital Gains at the following rates:

For LTCG - 20%

For STCG - Income tax slab rates of Seller.

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ACA Sarita Laddha (Practicing CA) (1225 Points)
Replied 12 January 2019

TDS on purchase of property from NRI is required to be deducted irrespective of transaction value of property .even if sale value of property is less than RS 50 lakhs.
TDS is required to be deducted on capital gain. however this computation of capital gain cannot be done by seller himself and should be done by IT officer. IT officer shall compute the capital gain and intimate the seller by issuing a certificate mentioning computation of capital gain. if certificate is not obtained by seller from IT officer the TDS to deducted on total sale price & not on capital gain. the seller will give this certificate to buyer & buyer will deduct TDS on the capital gain.