Dear Sir,
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As per the Indian Income Tax Act, when a resident purchases any property from a non resident, he has to deduct income tax (TDS) and pay the balance amount to the seller.
TDS rate is 22.88 per cent of the deal value if the property is worth anywhere between Rs 50 lakh and Rs 1 crore.
*In case the property is worth over Rs 1 crore, 23.92 per cent of the deal value must be deducted as TDS by the buyer.
*TDS of 20.80 per cent must be deducted even if the deal value is less than Rs 50 lakh.
You should first obtain TAN under section 203A of the Income Tax Act, 1961 before deducting TDS. TAN can be obtained by applying buy filling up the Form 49B.
TDS must be deducted at the time of making the payment to the NRI. The information about the TDS being deducted and the rate at which it was deducted should be mentioned in the sale deed between the NRI seller and the buyer.
The TDS deducted by the you should be deposited through Form number or challan for TDS payment on or before the 7th of next month in which the TDS is deducted.
The TDS can be deposited through banks that are authorised by government of India or the Income Tax Department to collect Direct Taxes. The deposit has to be made by the buyer.
If he provides sufficient proof of her Indian residency then only one per cent of the deal value is deducted by the you.
Also, if the deal value is less than Rs 50 lakh, no TDS deduction liability arises on such deals.