Section 195, ITA 1961 (Section 393(2), ITA 2025 from 1 Apr 2026) TDS Rate Finder

Section 194-IA applies only when the seller is a Resident Indian and the purchase consideration exceeds ₹50 lakhs (TDS rate: 1%). When the seller is a Non-Resident or NRI, Section 194-IA does not apply. Instead, Section 195, ITA 1961 (Section 393(2), ITA 2025 from 1 Apr 2026) applies — the buyer must deduct TDS at 20% (LTCG) or 30% (STCG) on the entire sale consideration, not just the gain. The buyer needs a TAN and must deposit via Challan 281. This is one of the most common compliance errors in NRI property transactions.

Form 15CB (Form 146 from 1 Apr 2026) is a certificate issued by a Chartered Accountant (CA) confirming: (a) the nature of payment, (b) applicable TDS rate under domestic law or DTAA, and (c) that TDS has been correctly deducted. It is required when the payment to an NRI or non-resident exceeds ₹5,00,000 in aggregate during a Financial Year. The CA must issue Form 15CB (Form 146 from 1 Apr 2026) with a UDIN before the remitter uploads Form 15CA (Form 145 from 1 Apr 2026) Part C on the Income Tax portal. Remittances initiated on or before 31 March 2026 continue to use Forms 15CA / 15CB; Forms 145 / 146 apply from 1 April 2026.

Under Section 195(1), the domestic TDS rate on interest paid to an NRI is 30.90%. If India has a Double Taxation Avoidance Agreement (DTAA) with the NRI's country of residence, the beneficial rate from the DTAA applies — typically 10-15% for interest. To claim the DTAA rate, the NRI must provide a TRC and Form 10F. Without these, the deductor must apply the full domestic rate.

If the NRI seller's actual long-term capital gain is significantly less than 20% of the sale consideration, they can apply to their Assessing Officer for a lower TDS certificate under Section 197 using Form 13. The AO issues a certificate specifying a lower rate, which the buyer then uses to deduct TDS.

No. Form 15CB (Form 146 from 1 Apr 2026) is not required for remittances that fall under the exempt categories in Rule 37BB Appendix I. The requirement depends on the nature of payment, taxability in India, and the remittance amount. When in doubt, the remitter should verify the exact category before filing Form 15CA (Form 145 from 1 Apr 2026).