TDS on Sale of Property- As per section 194-IA of the Income Tax Act, 1961, it is. The responsibility of the buyer to deduct tax @ 1%. The sale consideration or stamp duty value ( whichever is higher) if. The total sale consideration is 50 Lakhs or More.

Buyer has to file Form 26QB Challan and deposit tax and issue TDS Certificate ( form 16B) to seller. He require seller PAN ,Address, Mobile No. and Mail ID to file the form 26QB.

If the sale consideration is paid in installments then TDS to be deducted and deposited on every Installment.

Once the buyer obtains a TAN, they must deduct TDS on every payment made to the NRI seller. Thereafter, the deducted TDS must be deposited with the Income Tax Department. Through an e-challan on or before the 7th day of the next month.

TDS on Sale of Property by NRI- As per section 195 of the Income Tax Act, 1961, it is the responsibility of buyer to deduct tax in range of 12.5% to 30% (for LTCG or as per slab rates of STCG ) of the sale consideration or stamp duty value ( whichever is higher) on purchase of property from NRI.

Applicable TDS Rates for NRI (U/S 195)

Type of Capital Gain
Holding Period
Base TDS Rate
Effective TDS Rate (with surcharge & cess)
Short-Term Capital Gain
< 2 years
As per income slab
Up to 30% + surcharge + 4% cess
Long-Term Capital Gain
≥ 2 years
12.5%
~Upto 14.95% (with surcharge + cess)
Long-Term Capital Gain
(property bought before 23rd July, 2024
≥ 2 years
20%
Up to 20% + surcharge + 4% cess

To facilitate this process, the buyer is required to apply for and obtain a Tax Deduction Account Number (TAN) in their name. In cases where two or more individuals jointly purchase the property, each person involved must acquire a TAN.

Once the buyer obtains a TAN, they must deduct TDS on every payment made to the NRI seller and deposit the deducted amount through an e-challan with the Income Tax Department by the 7th day of the next month.

To fulfill their regulatory obligations, the buyer must file the TDS return in the following. Quarter after depositing the TDS amount. Upon successful filing of the TDS return the buyer can obtain. Form 16A, which is then provided to the NRI seller.

Under the Budget 2026–27 amendment to the Income Tax Act, 1961. Buyers must now deposit TDS using their PAN instead of a TAN. Making the compliance process simpler and more convenient.