Save Rs 588 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Tds on property purchased from nri

472 views

Save Share

Ashish Garg

21 Points Posted on 17 June 2020

hi ,
i have purchased a property from nri seller. i have deducted 20.8 percent. i am getting a notice for shart tds. income tax is computing as 31.2.
i am not able to understand why it is happening

Replies (2)

Quick Summary

This discussion clarifies the differing TDS rates applicable when purchasing property from an NRI seller. The rate depends on how long the NRI has held the property: 20.8% if held for over two years, and 31.2% if held for less than two years. The notice received indicates the tax department is applying the higher rate, suggesting the property was held for under two years.

Neha sharma

983 Points Posted on 06 March 2021

TDS @ 20.8 is applicable if property held by the NRI is held for more than 2 years.

However, if the property has been held by the NRI for less than 2 years, 31.2% would be the rate of TDS which would be applicable.

Therefore, the tax officer is correct in sending this notice as 31.2% TDS is applicable in such a case.

Josh

Manager

104 Points Posted on 07 March 2021

Hi, I have a question in this case. Can the benefit of form 26A be applied in this case if the payee (though NRI) has filed his return u/s 139 and paid the applicable tax