{"id":5005,"date":"2016-06-08T06:00:17","date_gmt":"2016-06-08T00:30:17","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=5005"},"modified":"2022-03-10T12:18:04","modified_gmt":"2022-03-10T06:48:04","slug":"tax-deduction-source-tds-buying-property-india-nri","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/tax-deduction-source-tds-buying-property-india-nri","title":{"rendered":"Tax deduction at Source (TDS) while buying a property in India from an NRI"},"content":{"rendered":"<p>As per Income Tax Act 1961, under section 195 , NRIs who are selling a property in India are liable to pay taxes that is in tune of 20% on the transaction made. This rate is 1 % in case of a Resident.<\/p>\n<p>Interestingly, the buyer has to deduct the tax at source before crediting such payment. In effect when a property buyer is buying a property from an NRI, the buyer is liable to deduct tax (TDS) from the payment\/s made. This deduction is to be made irrespective of whether there is gain or not, and non-compliance to this tax rule can attract a penalty on the buyer.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Rate of Deducting this TDS<\/strong><\/p>\n<p>Sale of immovable property by a Non Resident Indian is taxable under the income tax under Chapter XII-A of the Income Tax Act, more specifically under section 115E of the Income Tax Act 1961. As discussed above, the rate of tax is 20% of <strong>the Total Consideration Value<\/strong>.<\/p>\n<p>It should be noted that if the transaction is a loss, the NRI can obtain refund. He\/ She needs to file income tax returns \u00a0in India to claim refund of excess amount deducted.<\/p>\n<p><strong>Process and few important points for TDS deduction <\/strong><\/p>\n<ul>\n<li>The buyer should have a\u00a0Permanent Account Number (PAN)and\u00a0Tax deduction Account Number (TAN)\u00a0as per section 203A of the Income Tax Act 1961.<\/li>\n<li>The buyer should have Permanent Account Number (PAN) of the NRI before deducting the tax.<\/li>\n<li>The buyer should deposit the tax deducted with the government within seven days from the end of the month in which the transaction is made.<\/li>\n<li>The buyer should also file TDS returns electronically \u2013 to be submitted in Form No 27Q with basic details of the NRI along with his\/ her PAN and TAN details.<\/li>\n<li>The Buyer after filing TDS should issue a TDS certificate in Form 16A to the NRI within 15 days.<\/li>\n<\/ul>\n<p><strong>Situations where TDS is not deducted <\/strong><\/p>\n<p>There are certain situations under section 54 in which an NRI can get waiver of TDS. For instance, under situation when the NRI is planning to re-invest the capital gains of the property in another property or in tax exempt bonds within the stipulated time . In such cases, the NRI will be exempt from tax in India and would not like to have TDS deducted. For this, they will have to apply for a tax-exemption certificate under Section 195 of income tax act.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As per Income Tax Act 1961, under section 195 , NRIs who are selling a property in India are liable to pay taxes that is in tune of 20% on the transaction made. This rate is 1 % in case of a Resident. Interestingly, the buyer has to deduct the tax at source before crediting [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":5006,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[210],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/5005"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=5005"}],"version-history":[{"count":3,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/5005\/revisions"}],"predecessor-version":[{"id":54115,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/5005\/revisions\/54115"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/5006"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=5005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=5005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}