🏡 Buying Property from an NRI? Don’t Miss These Critical TDS Compliance Steps
Purchasing property from a Non-Resident Indian (NRI) is more than a real estate deal — it's a serious financial transaction with legal obligations. ⚖️ Stay compliant, avoid penalties! ❌
🔍 Understanding TDS Obligations
1. TDS on Full Sale Value: 💰 Unlike resident deals (1% TDS), buying from an NRI requires deduction on the full sale value under Section 195.
2. Applicable TDS Rates:
- 🕒 Long-Term Capital Gains: 12.5% + surcharge + 4% cess
- ⏳ Short-Term Gains: Taxed per applicable slab (typically 30%+)
3. Buyer’s Responsibilities: 🧾
- ✅ Obtain TAN (Tax Deduction Account Number)
- ✅ Deduct TDS before making any payment
- ✅ Deposit TDS using Challan ITNS 281
- ✅ File quarterly TDS Return (Form 27Q)
- ✅ Issue Form 16A to the seller
4. Lower/Nil TDS Certificate: 📜 NRI sellers can apply for Form 13 to reduce or eliminate TDS based on actual gains.
5. Repatriation of Funds: 🌍
- CA-certified Form 15CA/15CB
- Proof of tax compliance for money transfer abroad
6. Surcharge Slabs: 📊
- ₹50 lakh – ₹1 crore: 10% surcharge
- ₹1 crore – ₹2 crore: 15% surcharge
- ₹2 crore – ₹5 crore: 25% surcharge
💡 Final Thoughts
While purchasing from an NRI can be a great opportunity, proper tax compliance is crucial. 💼 Partner with a qualified CA, maintain meticulous documentation, and stay updated on regulatory changes. Remember: A well-executed transaction protects both buyer and seller! ✨
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