Ease TDS rules for buying house property from NRIs in Budget 2024
Every property buyer, being a resident individual, is required by law to deduct tax from the amount (price) he pays to the seller. However, where the seller is a tax resident in India, the TDS compliance is applicable only if the sales consideration exceeds Rs 50 lakh.
In such a case, the buyer is liable to deduct tax at source (at the time of payment) at the rate of 1%. Furthermore, the tax department has notified a simplified compliance process involving a single Form to be filed as a tax payment challan-cum-return under buyer's Permanent account number (PAN).
There is no need for Tax Deduction Account Number (TAN) for the buyer or any separate TDS return filing.
In contrast, when buying property from an NRI seller, in addition to the TDS compliance requirements being much more complex, the buyer is required to deduct tax at the applicable income tax slab 'rates in force' before making payment to the NRI seller.
The detailed tax compliance process for buying property from an NRI seller is as under:
Obtaining TAN (Tax Deduction Account Number): Buyer should acquire a TAN under section 203A of the Income Tax Act before deducting TDS. TAN is a 10-digit alpha numeric number.
