Answers ( 8 )

  1. According to the Indian Income Tax Act, when a person purchases any property from Non-Resident Of India (NRI), he has to deduct TDSi i.e., income tax, and pay the remaining amount to the seller. The buyer has to deduct 20% of the sale consideration as tax before making payment to the seller. NRI's who are selling their properties which are situated in India have to pay tax on the Capital Gains.

    Taxes are implied for NRI's in case of inheritance also. In case the property is inherited, the date purchase of the original owner will be considered for calculating whether it is a long term or short term capital gain. If the property is held for 2 or more years, it is considered as long term capital gain and 20% will be deducted. If the property is held for less than 2 years, it is considered as short term capital gain and TDS will be charged as per Income Tax Slab rates of the seller. The TDS can be deposited through banks that are authorized by the Government of India or the Income Tax department. The deposit should be made by the buyer.


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  2. The owner of the property is required to pay taxes upon sale of the property. The tax implication is based on the capital gains - LTCG or STCG. For NRIs as well, the same conditions apply. My cousin who lives in Canada now decided to sell his property which is in Hoshiarpur. I helped him out with the process so I can tell you about the TDS implications as well. I am giving below a detailed breakdown of TDS on sale of property by NRI for your reference as explained by my CA.

    TDS for NRI Property Sale

    If the property sale gets long term capital gains then the TDS is deducted at 20% of the capital gains calculated. 

    If the property sale gets short term capital gains then the TDS is deducted at 30% of the capital gains calculated.

    You may also want to understand what is Long term capital gains and short term capital gains. Let me tell you it is nothing but the holding period difference. LTCG is when the holding period exceeds 2 years whereas STCG is when the holding period is less than 2 years.

    You must also know about tds on sale of property by NRI Form 27Q. The buyer needs to deposit TDS to the government, once that is submitted he will apply for TDS return with Form 27Q. After the TDS returns are filed, the buyer will issue TDS certificate Form 16 A to you. So make sure that he does file for TDS return. 

    I hope you have your answer for TDS on sale of property by NRI.

     

    Check these out:

    What is TDS for NRI selling property in India

    How do you deduct TDS on purchase of property from NRI

     

    If you have a property in India and want it to be managed carefully then check out NoBroker Property Management Services for NRIs. You will get the benefit of good rental yields and relief from all the property related issues.


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    Best answer
  3. Under the Indian income tax laws, properties purchased/sold in India by NRIs are liable for taxation and TDS is needed to be deducted. The buyer is required to deduct TDS and pay the remaining amount to the seller. Seller’s residential status determines the amount to. For instance, if the seller is an NRI, then the TDS to be deducted will be based upon the quantum of money received by the seller. If the seller is a resident of India, then 1 percent of the property’s sale price will be deducted as TDS. Let’s read about rate TDS for NRI selling property in India:

    Rates of TDS on sale of property owned by an NRI: 

    Short-term capital gains (STCG) tax on the sale of property held for less than 2years: 30%

    Long-term capital gains tax (LTCG) on the sale of property held for more than 2years: 20%

    I hope now you know NRI selling property in India TDS.

    TDS on sale of property by NRI in India for LTCG

     

    Sale Price (A)

    LTCG tax

    (B)

    Surcharge on LTCG tax

    (C=A+B)

    Total tax (including surcharge)

    (D)

    Education and Health cess

    ( C + D )

    Applicable rate of TDS (including cess and surcharge) 

    Rs.2 crores - Rs.5 crores 20% 37 percent of LTCG tax 27.4% 4 percent of total tax 28.496%
    Rs.1 crore - Rs.2 crores 20% 25 percent of LTCG tax 25% 4 percent of total tax 26%
    More than Rs.1 crore 20% 15 percent of LTCG tax 23% 4 percent of total tax 23.92%
    Rs.50 lacs - Rs.1 crore 20% 10 percent of LTCG tax 22% 4 percent of total tax 22.8%
    < Rs.50 lacs 20% Nil 20% 4 percent of total tax 20.8%

     

    TDS on sale of property by NRIs in India for STCG

    In this case, cess and surcharge will be added to the applicable tax rate in the same way as in the case of LTCG.

    I hope I cleared all your queries related to TDS on NRI property sale in India.

    Read what are the conditions for NRI purchasing properties in India

    Learn why should NRIs invest in India

    Find out how NRIs take housing loan in India


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  4. Here, I will resolve your query regarding TDS on sale of property by NRI. There is a capital gains tax

    to be paid on the sale of property in India. Investing it in specified ways, on the other hand, can

    minimise your taxable income. However, there are restrictions on how much money you can bring

    home after selling your home abroad. During India's property boom, many NRIs, may have made an

    investment in real estate. When they have received an excellent offer, they may make the decision to

    sell. The tax liability or TDS on sale of property for NRI are important factors to keep in mind, even

    for the NRIs.

    The amount of tax you owe on the sale of real estate is determined by how long you owned it.

    Long-term capital gains tax applies when you sell a property you've owned for more than two years.

    Short-term capital gains tax is due on property that has been owned for less than two years2. Based

    on the TDS on sale of property by NRI form 27q, the following are the applicable tax rates:

    ● A tax rate of 20 percent is applied to long-term capital gains.

    ● All capital gains, regardless of when they occur, are taxed at a flat rate regardless of your

    income level

    A company's capital gains are equal to the difference between the purchase price and the sale price,

    less any expenses spent during the transaction (brokerage, stamp duty, registration charges, etc.). I

    think I have solved your query regarding TDS for NRI property sale.


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  5. You must be wondering about the rate of TDS on sale of property by NRI. In the event that a resident

    acquires property from an NRI and holds it for more than two years, or sells it within those two

    years, the resident must deduct TDS at a rate of 20 percent, or 30 percent. TDS + surcharge. Health

    and education cess must be included in the deduction. According to the TDS on sale of property by

    NRI form 27q:

    ● Tax rate on properties under 50 lakh is 20.8 percent (including surcharge and cess)

    ● In the range of INR 50 lakh to 1 Crore, the total tax is 22.88 per cent.

    ● Tax rate on properties over 1 Crore is 23.92 percent

    A reduced level of TDS

    The excess TDS can be refunded to you if the tax deducted at source exceeds your taxable income.

    It's possible to get a certificate that permits you to file for a lower TDS on sale of property for NRI

    instead of going through this time-consuming process. Please keep in mind that you must first submit

    an application before signing the sale agreement. After determining the capital gains, the assessing

    officer will calculate the TDS. Instead of waiting for a refund, you'll get access to your money

    immediately this way.

    I have answered about your query of TDS for NRI property sale. You should keep all factors in mind

    before taking the decision to sell the property in India.


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    For Indians, buying a home is a popular investment. Many NRIs possess real estate in their home

    country. An NRI may consider selling an Indian property because managing one from another country

    is challenging. You must be wondering what will be the TDS for NRI selling property in India Aside

    from finding a buyer, it's critical to know the tax implications of selling real estate as an NRI,

    particularly with regard to TDS (Tax Deduction at Source) laws.

    What is the tax rate on an NRI's property sale?

    There are two factors that determine the amount of tax due when selling real estate or NRI selling

    property in India TDS.

    ● The length of time the property was owned

    ● The amount of money you make when you sell a piece of property.

    Long-term capital assets are those that have been owned for at least two years. Capital gains on the

    sale of these assets are subject to a tax of 20%. (Plus surcharge and cess). I think I have answered

    your queries allied to TDS on NEI property sale in India and NRI property sale in India.


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    1. Here, I will provide you answers regarding TDS for NRI selling property in India and NRI property
    2. sale in India. The buyer is obligated by Income Tax regulations to deduct tax from the sales
    3. consideration and deposit it in the Indian Government Treasury. Because of this, the purchaser
    4. makes TDS deductions before paying the remainder to the NRI seller. The tax is deducted by 20% if
    5. the property is owned for more than two years (plus surcharge and cess)
    6. The TDS on NRI property sale in India, should, in theory, will be deducted from capital gains.
    7. Customers typically deduct the TDS before making a purchase. When the buyer pays the NRI, the
    8. TDS amount is deducted as well. TDS must therefore be deducted even if an advance payment is
    9. made for the property. I have explained you the laws related to NRI selling property in India TDS.

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  6. Hi Buddy,

    Being an NRI myself, I have done thorough research on the NRI property sale TDS. I have gone through all the above-mentioned answers and I feel that everyone has written very nice and informative answers.

    Pay your utility bills using credit cards through NoBroker and earn reward points on your card.

    I am especially impressed with Shreya Maam’s answer. As I agree with what she mentioned about TDS NRI property sale, that is when an NRI sells the property, the buyer must deduct TDS at a rate of 20%. A TDS of 30% will be applied if the property is sold within two years of acquisition (reduced from the date of purchase).

    However, with my research on NRI property sale tax, I would like to add a few more observations that I discovered about the same. NRIs can claim Section 54 and Section 54EC exemptions on long-term capital gains from the sale of residential property in India.

    Exemptions on Section 54:

    It is available when an NRI's dwelling property is sold for a long-term capital gain. The house can either be occupied or rented out. Please keep in mind that you only need to invest the amount of capital gains, not the total sale receipt. In fact, the new property's purchase price may be more than the amount of capital gains. Your exemption, however, will be restricted to the whole capital gain on the sale.

    Additionally, you have the option of purchasing this home one year before or two years following the sale of your own.

    You may also put the proceeds toward the construction of a home, but the work must be finished within three years of the selling date.

    Exemptions on Section 54 F:

    It is accessible when the sale of any capital asset other than a residential house property results in a long-term capital gain. To qualify for this exemption, an NRI must purchase or construct one residential property within one year of the date of transfer or within two years of the date of transfer of the capital asset. This new home property must be in India and cannot be sold within three years of purchase or construction.

    Furthermore, the NRI should not possess more than one house property (apart from the new house) and should not purchase or construct within two years.

    Exemptions on Section 54 EC:

    If you invest your long-term capital gains in specific bonds, you can save money on taxes. For this aim, bonds issued by the National Highway Authority of India (NHAI) or the Rural Electrification Corporation (REC) have been designated. These shall not be sold before the lapse of 5 years (before to 2018, it was 3 years) from the date of sale of the house property and are redeemable after 5 years (prior to 2018, it was 3 years).

    You cannot deduct this investment under any other circumstances. You have six months to invest in these bonds, but you must do it before the return filing deadline to qualify for the exemption.

    I would like to conclude my answer here about the NRI property sale TDS. I hope this helps:)

    Read More:

    How To Pay TDS On Property Purchase From NRI?

    What Is TDS On Sale Of Property By NRI?


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