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Payment to NRI for Flat Purchase

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Vicky Kumar

Job

124 Points Posted on 30 June 2024

I have purchased a flat for 86 lacs.....there were two sellers son(NRI) and mother(Resident Indian).....I have paid them equally i.e. 43 lacs each

I have deducted the tds differently for both the sellers as per their residential status. For Son(NRI) I deducted tds as 20.8% on 43 lacs and for mother I deducted 1% on 43 lacs.

But I have made payment to them using self funding and home loan... in sellers either or survivor account (where mother is primary account holder)......using separate cheques in mother and son name.

So my question is, can I make payment to NRI in their either or survivor saving account where his mother is primary account holder or NRO account is mandatory. I have deducted his tds as per NRI status. NRI does not want to take this money outside India and wanted to give this to his parents for their need.

Replies (4)

Quick Summary

This discussion clarifies payment procedures when purchasing a flat from a seller who is an NRI and a resident Indian. It confirms that TDS should be deducted differently based on residency status. Importantly, payment to the NRI can be made into an 'either-or-survivor' savings account held with a resident Indian (like their mother) if the funds are intended to remain in India, making an NRO account not strictly mandatory in this scenario.

Deepika Dawale

Finance data

289 Points Posted on 01 July 2024

You can deposit the NRI son's share (with the deducted 20.8% TDS) into the either-or-survivor account as long as the mother is a resident Indian. This account type is permitted for NRIs with resident Indian close relatives, and the TDS deduction for NRIs applies. Since the funds are staying in India, an NRO account is not mandatory in this case. Ensure you have proper documentation proving the NRI status and the purpose of the transfer for future reference.

Vicky Kumar

Job

124 Points Posted on 01 July 2024

Hi Deepika,

I was told that the fund will stay in India...and I have deducted the proper tds as per NRI status.

lets say if they transfer the fund from their either or survivor to son NRO account...then will their be any problem for me in this case ? As I have deducted the complete tds on NRI payment and submitted to income tax