TDS on immovable property purchased from NRI

TDS is required to be deducted at the time of making payments including advance payments to NRI irrespective of the total amount paid. TDS Shall be deducted on each payment made to the seller.

Seller shall intimate the capital gains arising from the sale to the buyer and the buyer should approach his Income tax officer for the calculation of Capital gain. The officer Issue a Capital gain certificate to the seller.The same shall be given to the buyer and he shall deduct TDS based on the certificate issued by the Income tax officer as per rate mentioned above.

Section 195 of Income tax  or TDS on capital gain is applicable when purchasing a property from NRI. The rate should be as follows.

1. Long Term Capital Gains –  For property held more than 3 years – 20.6 %
2. Short term Capital Gains – For property held less than 3 years  – As per Income tax slabs

For more details refer: tds-property-purchase-nri

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