How much TDS on buying from an NRI?

Unlike a resident seller (1% above Rs 50 lakh), there's no threshold - TDS applies to the whole deal. Most buyers deduct on the full price at slab/LTCG rate plus surcharge/cess unless the seller has a Form 13 certificate. No Rs 50 lakh threshold - TDS applies from the first rupee Buyer needs a TAN before deducting - the PAN-only 26QB/141 process doesn't apply Default: deduct at slab/LTCG rate plus surcharge/cess on full consideration, unless seller has a Form 13 certificate File quarterly via Form 27Q, issue Form 16A (not 16B)

Is there a threshold for NRI property TDS?

Unlike a resident seller (1% above Rs 50 lakh), there's no threshold - TDS applies to the whole deal. Most buyers deduct on the full price at slab/LTCG rate plus surcharge/cess unless the seller has a Form 13 certificate. No Rs 50 lakh threshold - TDS applies from the first rupee Buyer needs a TAN before deducting - the PAN-only 26QB/141 process doesn't apply Default: deduct at slab/LTCG rate plus surcharge/cess on full consideration, unless seller has a Form 13 certificate File quarterly via Form 27Q, issue Form 16A (not 16B)

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How Much TDS Do I Deduct When Buying Property From an NRI?

Short answer: Unlike a resident seller (1% above Rs 50 lakh), there's no threshold - TDS applies to the whole deal. Most buyers deduct on the full price at slab/LTCG rate plus surcharge/cess unless the seller has a Form 13 certificate.

Law: Section 195, Income-tax Act 1961 / Section 393(2), Income-tax Act 2025 · Authority: CBDT · Status: in force · Checked 25 Sept 2026

What you need to know

No Rs 50 lakh threshold - TDS applies from the first rupee
Buyer needs a TAN before deducting - the PAN-only 26QB/141 process doesn't apply
Default: deduct at slab/LTCG rate plus surcharge/cess on full consideration, unless seller has a Form 13 certificate
File quarterly via Form 27Q, issue Form 16A (not 16B)

Who this applies to: buyers purchasing from NRIs, NRI sellers

Official / primary source: incometax.gov.in (government source)

The law behind it

Form 27Q - quarterly TDS statement for payments to non-residents/NRIs

When a buyer purchases property from an NRI seller, TDS must be deducted under Section 195 at a much higher rate than the usual 1% (based on the NRI's actual capital gain and slab, unless a lower-TDS certificate applies), and reported quarterly on Form 27Q rather than Form 26QB. This is one of the most commonly missed compliance steps in NRI property deals.

Form 27Q (Section 195); renumbered Form 144 under Income-tax Act 2025 · amended · source

Section 393(1), Income-tax Act 2025 - Consolidated TDS on Property/Rent/Contractors

The new Act merges old Sections 194-IA, 194-IB, 194-I plus contractor/professional TDS into one Section 393(1), reported on one Form 141. The 1% rate and Rs 50 lakh threshold for property from a resident are unchanged - only the paperwork changed.

Section 393(1), Income-tax Act 2025 · in force · source

TDS on Sale of Property by an NRI - Section 195

When anyone buys property from an NRI seller, the buyer must deduct TDS on the full sale price (not just the profit) before paying - 20% for long-term gains and up to 30% for short-term gains, plus surcharge and cess. This applies at every price point, unlike the simpler 1% TDS rule for resident sellers.

Section 195, Income-tax Act 1961 · in force · source

24-Month Holding Period for Long-Term Capital Asset Status (Property)

Hold a property over 24 months before selling and your gain is 'long-term', with better tax treatment. This has applied since AY2018-19 and was NOT changed by the July 2024 budget reforms.

Section 2(42A), Income-tax Act 1961 / Section 2, Income-tax Act 2025 · in force · source

Work out your own numbers

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