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Tds on nri property purchase

vikas garg (MBA) (140 Points)

13 July 2017

I am planning to buy flat from NRI for 1.1 crore in ahmedabad 9 year old. I read on internet that property purchased from nri attract tds of 20.66 percent to be deducted by buyer. However the seller is telling that tds will be 1percent only .Please advise what is the tds to be deducted. Also what are the other formalities required to be done in case of nri property.Thanks

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2 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178169 Points)
Replied 13 July 2017

TDS deduction when the seller is NRI........ will be at 22.66% (10% surchage for above 1 CR.) for property held for more than 3 years, (reduced to 2 years from this FY).

In case holding period is less than 3 years then Short Term Capital Gain Tax will be applicable as per income tax slab. In case of short term capital gain, TDS applicable will be 33.99% irrespective of tax slab of the NRI.

If payment is made to a Non-Resident then section 194-IA will not be applicable, which provides 1 % TDS deduction for property purchased from RESIDENT INDIAN

You will also be required to obtain TAN no for each purchaser/s. For details refer:

Alternatively, NRI Seller may apply u/s. 197 of IT act, for ‘Nil’ or ‘TDS at reduced rate’ order from the income-tax officer. The income-tax officer, upon your application, will issue a certificate stating that ‘Nil’ TDS or ‘TDS at reduced rate’ will be applicable for the said transaction. Details refer: