What is TDS on sale of property by NRI?

Here are the complete details about the

NRI property sale TDS.

TDS on the sale of property by an NRI in India is governed by Section 195 of the Income Tax Act, 1961. Here are the key points to consider:

The applicable TDS rate on the sale of property by an NRI depends on the nature of the property and the capital gains. The TDS rate is 20% of the sale value for long-term capital gains and 30% for short-term capital gains.

Long-Term vs. Short-Term Capital Gains:

• If the property is held for more than two years before sale, the gains are considered long-term.

• If the property is held for two years or less, the gains are considered short-term.

The NRI seller should request a TDS certificate (Form 16B) from the buyer after the TDS is deposited. This certificate serves as proof of TDS deducted.

The NRI seller should file an income tax return in India to report the property sale. The TDS amount will be considered as advance tax paid. These are the details about

TDS on sale of immovable property by NRI.

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• If you want to know about the TDS for NRI selling property in India, I will tell you about it here. It’s
• possible that calculating capital gains won’t be a simple process. If the buyer is an NRI, determining
• resident status and computing TDS may be a problem. To avoid a higher TDS deduction, the seller
• may not disclose their residency status or identify themselves as “Resident Indians.” Additionally, the
• NRI may be unsure about their residency status at times. Purchasers commonly exclude TDS from the
• entire purchase price in order to avoid the inconvenience of computing capital gains or making an
• error in the calculation. TDS for NRI selling property falls in the range of 20 % to 30 %.
• I think your queries related to NRI selling property in India TDS and TDS on NRI selling property in
• India are resolved now

As an NRI, every time I sell a property, I deduct TDS with all the precautions. I have a lawyer in India who helps me with all the procedures. In this, a part of the buyer's payment will be delayed for the seller, who will then receive the remaining funds. So let’s understand the TDS on sale of property by NRI above 50 Lakhs.

What is TDS on sale of the property above 50 lakhs?

TDS must be withheld by the buyer at a rate of 1% of the entire transaction value. In this case, it is the buyer who must deduct TDS, not the seller. This is what my lawyer advised me about the TDS on sale of property by NRI less than 50 lakhs.

What is TDS on property purchase from NRI below 50 lakhs?

You don’t have to deduct any TDS if the sale evaluation is less than Rs 50 lakhs.

How you as an NRI can save double tax on property sales in two countries?

Many nations charge taxes to citizens who sell real estate, regardless of where the residence is situated. For example, if an NRI residing in the US wants to sell property in India, taxation will be due in both the US and India. Because of the NRI's domicile in the US and the property's ownership in India. There will be double taxation because of taxes levied by both the US and India.

In an effort to stop the imposing of double taxes, India has negotiated double tax avoidance agreements with foreign countries. These agreements state that anyone who has paid tax on the sale of property in India is qualified to obtain a tax incentive for those payments. It lowers the amount of tax that must be paid in the other country.

In such a case, the country from which the tax credit has been requested demands you to provide the correct declarations. For example, if you are an NRI living in the US and you sell the property in India, you are required to disclose any gains or losses in Section D of your US tax return.

This is all about the TDS on sale of property by NRI above 50 lakhs.

TDS is tax deducted at sources. The government of India introduced TDS so that the tax is deducted at the very source of income and submitted to the authorities duly. When it comes to transactions with NRI, the rules are applicable similarly. TDS on sale of property by NRI below 50 lakhs will also be applicable since there is no threshold limit set by the government. I will tell you more on this subject below. Keep reading.

The rate of TDS on sale of property by NRI below 50 lakhs or above 50 lakhs remains the same. The rules state that buyers must deduct 20% + surcharge + cess in case of LTCG and 30% in case of STCG.

Irrespective of the amount, TDS is deducted at the same rate. However, the NRI has an option to get TDS deducted at a lower rate. For this he has to submit an application to an assessing officer in the Income Tax Department. He/she will verify the claims and upon satisfaction issue a certificate for the buyer to deduct TDS at a lower rate as determined by him/her. The seller will submit this certificate to the buyer before they make TDS deductions.

I hope you are satisfied with my answer about TDS on sale of property by NRI below 50 Lakhs.

Have a good day :)