My client purchased a property from an NRI and we have deducted 20% Plus Cess and Surcharge.
Later the TDS processed with defaults and intimated that the applicable rate is 30%. They have raised demand for short deduction.
1.What is the actual rate of TDS when we are buying property from an NRI?
2.Before we deducting the TDS, whether we need to assess the property holding period if any?
When buying property from an NRI, the buyer is required to deduct TDS at the following rates:
Long-term capital gain (LTCG):
If the property sold is classified as a long-term capital asset (held for more than 2 years), the TDS rate is 20% (plus applicable surcharge and cess).
Short-term capital gain (STCG):
If the property is sold within 2 years of acquisition (short-term capital gain), the TDS rate is 30% (plus surcharge and cess).
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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