Buying a house from non-resident seller? Important to know the TDS laws | H&R Block | Blog
Want to buy a home? You must know the associated TDS rules!
June 23, 2016
How to File Tax Returns When You Have Multiple Form 16s
July 28, 2016

Buying a house from non-resident seller? Important to know the TDS laws

TDS deduction on purchase of house property from NRI

TDS rules vary depending on whether you are purchasing house from a resident Indian or an non-resident. In our previous blog we talked about the TDS rules linked with purchase of house property from a resident seller. Now, let us understand the TDS rules associated with purchase of house property from an NRI. Tax rules are little more complicated in this case.

TDS rules in this case are governed by section 195 of the Income Tax Act 1961. Under this section TDS needs to be deducted irrespective of the value of the property and minimum threshold limit of Rs. 50 lakh does not apply. Let us have a look at some other important points.

Key points in case of purchasing property from non-resident Indian:

1) As was the case in our earlier post, here also you need to deduct TDS and deposit it with the government within 7 days from the end of the month in which TDS is deducted.

2) Before making any payment to a non-resident, you need to obtain a certificate in Form 15CB from a Chartered Accountant.  Further you also need to file an online declaration in the Form 15CA (undertaking by remitter/you) on the income tax website through your PAN login.

[ Read: How to File Form 15CA and Form 15CB ]

3) TDS should be deducted at the time of actual payment or credit to the payee/seller whichever is earlier. In case of payments being done in the form of installments, TDS should be deducted as and when installment is paid.

4) Before you deduct TDS, you need to obtain TAN u/s 203A. You can go here and apply for TAN by filing Form 49B.

5) You can deposit TDS with the government by filing up Challan 281 through any of the authorized bank branches. For online payment of TDS you can click here.

6) Just depositing the TDS is not enough. You are also required to e-file TDS return by submitting Form 27Q. If payment is made on installment basis then TDS return should be filed on quarterly basis.

7) After filing TDS return, you should issue TDS certificate also known as Certificate of Deduction of Tax i.e. Form 16A to NRI Seller. This certificate should be issued to NRI Seller within 15 days of due date of TDS returns for the quarter.

8) Remember to deduct and deposit TDS on time as failure to do so can lead Income Tax Department to impose severe financial penalties.

Be it any tax, it is advised to be informed about the relevant rules and always pay your taxes on time & e-file your tax return.


  • Smart and Hassle-free tax filing experience withdedicated tax expert
  • 100% Secure Online Tax Vault to store all your documents
  • Year-round post filing support
  • Share: 
H&R Block India
H&R Block India
H&R Block India is the subsidiary of the world's leading tax filing company, H&R Block, US. In India we provide online and personalised tax filing services for individuals, professionals and businesses. We also provide managed services for GST.


  1. Mrugesh Shah says:

    I m buying a property from NRI for 72 lakh rs, please help with TDS process, also pls confirm if TAN is mandatory

  2. Khushboo says:

    We purchased a flat from a NRI for 1.1 crore in July 2017. We were u aware of this TDS law during that time. The seller told us he would be making a loss on the property so we don’t need to do it. How can we fix this now? The seller indeed didnt make any profit on the property but we are told we should have still deducted the TDS?

Leave a Reply

Your email address will not be published. Required fields are marked *