What is the TDS u/s 195 for Sale of Agricultural land by NRI?

TDS / TCS 3466 views 2 replies

Sravan _

3 Points Posted on 17 December 2021

I am buying a property (4 Acres of Agricultural land) from a NRI friend from same village as myself. This land is about 2kms from the municipal limits of Gudivada (Population of 1.50 lakh) Andhra Pradesh. NRI acquired the land via a gift deed from his grand father in 1977.

Below are the details of Transaction.. (Figures in rupees)
1. Can you please advice me how much TDS (including any cess and surcharge) I/buyer have to deduct under section 195 for current FY? Is it 20.6, 20.8? or 22.8 etc..?
2. Is there any benefit for NRI to obtain Lower tax deduction certificate in this case? and How much it will be?
3. What is the actual LTCG tax (irrespective of TDS u/s 195) NRI has to pay?
4. The NRI is willing to reduce the price if surcharge is impacting TDS buyer has to deduct.. Is that the case here?

Cost of 4 Acre land in 1977 as per document - 32,000
Cost of 4 Acre land in 2001 as per Fair market value by Government - 3,20,000
CII adjusted value of 4 acre land - 10,14,400

Sale price of 4 Acre land (January 2022)- (25,62,000*4) = 1,02,48,000

Thank you in advance..

Replies (2)

CA Aakarsh Jain

10436 Points Posted on 18 December 2021

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Neha sharma

1257 Points Posted on 05 January 2022

1. If this is a rural agricultural land, then No TDS would be deducted. However, if this is not a rural agricultural land - then TDS would be required to be deducted.

2. Yes, the NRI can apply to the Income Tax Officer in Form 13 to lower the TDS Rate

3. If this is rural agricultural land, then No Tax would be applicable. However, if this is not a rural agricultural land, then Tax would be levied @ 20% + Surcharge + Cess

4. Yes, Surcharge rate increases with increase in Sale Price. If the Sale Price increases, the TDS Rate (incl. of Surcharge and Cess) would be 26%. Refer: https://www.charteredclub.com/tds-property-purchase-nri/