Buying NRI property

Hi Yogesh,
Here are the list of steps one should follow while go for deduction of TDS:- 1) TAN- Before deduction of TDS under section 195, buyer should obtain TAN under section 203A of the Income Tax Act, 1961.

2) TDS under section 195 should be deducted at the time of making payment to NRI seller. It should be clearly mentioned in sale deed between NRI seller and buyer that TDS is deducted at specific TDS rate under section 195 and buyer will product TDS certificate to NRI Seller.

3) 3. TDS deducted by buyer should be deposited through Form No / Challan for TDS Payment on or before 7th day of next month in which the TDS is deducted.

4) TDS under section 195 can be deposited by the buyer only through banks authorized by Govt of India / Income Tax Department to collect Direct Taxes.

5) After depositing TDS, the next step for buyer is to electronically file TDS return by submitting form 27Q. The TDS returns are filed quarterly i.e. for TDS deducted during the quarter.

Hi David,
But if the Buyer fail to deduct or deposit TDS under section 195 then buyer will be declared as Assessee in Default as per section 201 of Income Tax Act. All the tax dues including interest and penalty will be recovered from buyer by the income tax department. A buyer cannot claim ignorance ref to TDS provisions under section 195 while buying a property from NRI.