Harun Raaj & Associates · Tools
NRI Property Sale TDS Estimator
TDS to be Deducted: ₹0
Effective rate: 0.00%
| Base tax | ₹0 |
| Surcharge | ₹0 |
| Health & Education cess | ₹0 |
| Total TDS | ₹0 |
TDS base: ₹0 · Statutory section: s.2(29B) + s.112
Confirm the FA 2024 amendment to s.112(1)(e): property acquired before 23-Jul-2024 — whether the seller has an explicit election or must compute both and use the lower. CBDT has clarified this but confirm the exact mechanism.
Timeline: AO must issue LDC within 30 days of application under Rule 29B. In practice, takes 2-4 weeks. Plan LDC application 2 months before expected transaction.
- File Form 13 application on the Income Tax e-filing portal (form under 'request for lower/nil deduction of TDS')
- Provide: computation of capital gains, indexed cost calculations, proof of acquisition date and price
- AO issues certificate specifying: applicable TDS rate (usually on gains, not gross consideration)
- Certificate is valid for the financial year mentioned
- Buyer deducts TDS at the rate specified in the LDC certificate, NOT the statutory s.195 rate
Whether Form 13 LDC application must be made before the sale agreement or can be made after — the certificate must be obtained before the payment/credit to seller. AOs may not backdate certificates. Confirm current e-filing portal procedure for Form 13.
- Deduct TDS at the time of payment or credit, whichever is earlier
- Obtain TAN (Tax Deduction Account Number)
- Deposit TDS in 7 days from end of month of deduction
- File Form 27Q (not 26QB) — quarterly TDS return for payments to non-residents
- Issue Form 16A (TDS certificate) to NRI seller within 15 days of due date of filing 27Q
Tax Exemptions Available
Individual or HUF; LTCG from sale of residential house property. Purchase new residential house 1 year before or 2 years after sale; or construct within 3 years. Only 1 house can be bought (2 houses allowed if LTCG does not exceed ₹2 crore — once in lifetime)
Whether NRI sellers qualify for s.54 — yes, s.54 applies to individuals including NRIs who sell a residential house. NRI can buy new house in India for exemption. Whether new house can be abroad — no, s.54 requires new house in India.
All taxpayers including NRI; LTCG from any long-term capital asset (including land, building). Invest up to ₹50 lakh in specified bonds (NHAI/REC/SIDBI as notified) within 6 months of transfer
Current NHAI/REC bond issuance status and whether ₹50L cap is per taxpayer per FY or per transaction — it is ₹50L per FY in aggregate across all specified bonds. Confirm whether these bonds are currently available for subscription (issuances are periodic).
Individual or HUF; LTCG from sale of ANY long-term capital asset OTHER than residential house. Invest NET CONSIDERATION (not just gains) in one residential house in India; same time limits as s.54. Proportional exemption if not full net consideration invested.
Whether s.54F permits NRI to invest in house abroad or only in India — only in India. Whether RNOR and NR can claim s.54F — yes, but the residential house must be in India.
Whether the 10-year holding period for FEMA repatriation has been relaxed or modified — FEMA 21(R) has been updated multiple times. Confirm current holding period requirement and USD 1M cap applicability to each class of property (residential vs commercial).
The single most common error in NRI property sales is buyer deducting 1% TDS (assuming s.194-IA). This is WRONG — s.195 applies. Tool must prominently show this. Also: buyer faces penalty u/s 201 for shortfall in TDS deduction. CA consultation recommended for both buyer and seller before transaction.