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TDS on Buying a Property from NRI in Hindi

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Published on 17 Feb 2020 / In NRI

TDS on Buying a Property from NRI


Particulars LESS THAN 50 L 50 LAKH TO 1 CR MORE THAN 1 CR
Tax Rate 20% 20% 20%
Add: Surcharge 0% 10% of above 15% of above
Total Tax including Surcharge 20% 22% 23%
Add: Cess 4% 4% 4%
Applicable TDS Rate 20.80% 22.88% 23.92%

Short Term Capital Gain – If the property is held for a period of less than 2 years then the gain arising to the non-resident is short-term in nature and taxable according to the applicable income tax slab. The surcharge and cess shall also be added to the applicable tax rate as per the income tax slab in the similar manner as calculated above for the long-term capital gain. short term gains shall be taxed at the applicable income tax slab rates i.e. 30% (31.20%)


General Requirement for Buyer TDS on Buying a Property from NRI

A lot of compliances has been applied to the buyer at the time of purchasing the property from non-resident. These compliances are exactly similar which is required to be followed for filling a TDS return: –

• Buyer should have TAN (Tax Deduction and Collection Account Number).

• TDS deducted should have been deposited within 7 days from the end of the month in which TDS is deducted. For example, if TDS is deducted on 28th June then the deposit due date is 07thof July.

• TDS deducted is required to be deposited using Challan No./ITNS 281.

• TDS return is required to be submitted within 31 days from the end of the quarter in which TDS is deducted using TDS Form 27Q.

• TDS certificate is required to be generated after filing TDS return within 15 days from the due date of submission of TDS return.

How shall the TDS be deducted in a case where the property to be sold is jointly owned by a resident and an NRI?

TDS for a resident shall be deducted @ 1% and for NRI @ 20.8% of the value in proportion of their holding.
For example; a property equally and jointly owned by Mr. A (resident) and Mr. B (NRI) is to be sold at Rs 80 lakh rupees, TDS shall be deducted @1% on Rs. 40 lakhs for MR. A and @ 20.8% on Rs 40 lakhs for Mr. B.


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