{"id":2983,"date":"2026-08-06T17:54:56","date_gmt":"2026-08-06T12:24:56","guid":{"rendered":"https:\/\/khannaandassociates.com\/blog\/?p=2983"},"modified":"2026-08-06T17:54:57","modified_gmt":"2026-08-06T12:24:57","slug":"tds-on-property-purchase-from-nri","status":"publish","type":"post","link":"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/","title":{"rendered":"TDS on Property Purchase from NRI \u2013 New Simplified Rules from October 2026"},"content":{"rendered":"\n<p>If you are planning to buy property from an NRI in India, your <strong>TDS on property purchase from NRI<\/strong> obligations have just changed in your favour. Effective October 1, 2026, the Central Board of Direct Taxes (CBDT) has introduced a landmark simplified compliance framework under Section 195 of the Income Tax Act, 1961 \u2014 making NRI property transactions faster, more transparent, and legally secure for all parties involved.<\/p>\n\n\n\n<p>This update carries particular significance for buyers and sellers across Rajasthan \u2014 especially in Jaipur, where NRI real estate investment has surged dramatically over the past three years. Whether you are a resident Indian buying a property from an overseas-based NRI, or an NRI looking to sell inherited or invested property in India, these new rules directly determine your legal and financial obligations.<\/p>\n\n\n\n<p>At <a href=\"https:\/\/khannaandassociates.com\/\">Khanna &amp; Associates<\/a>, our senior tax and real estate advocates in Jaipur have been tracking these amendments in real time to ensure our clients stay protected, compliant, and financially optimised. This article provides a comprehensive, step-by-step breakdown of everything you need to know.<\/p>\n\n\n\n<p><strong>External Reference:<\/strong> <a href=\"https:\/\/www.incometax.gov.in\" target=\"_blank\" rel=\"noopener\">Income Tax Department India \u2014 incometax.gov.in<\/a><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"825\" height=\"1024\" src=\"https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg-825x1024.png\" alt=\"TDS\" class=\"wp-image-2984\" srcset=\"https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg-825x1024.png 825w, https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg-242x300.png 242w, https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg-768x953.png 768w, https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg-1237x1536.png 1237w, https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg-1650x2048.png 1650w, https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg-1200x1490.png 1200w, https:\/\/khannaandassociates.com\/blog\/wp-content\/uploads\/2026\/08\/Gemini_Generated_Image_2regc92regc92reg.png 1856w\" sizes=\"(max-width: 709px) 85vw, (max-width: 909px) 67vw, (max-width: 984px) 61vw, (max-width: 1362px) 45vw, 600px\" \/><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_75 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#What_is_TDS_on_Property_Purchase_from_NRI_%E2%80%94_Complete_Definition_Overview\" >What is TDS on Property Purchase from NRI? \u2014 Complete Definition &amp; Overview<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#Legal_Framework_Regulations_Governing_NRI_Property_TDS_in_India\" >Legal Framework &amp; Regulations Governing NRI Property TDS in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#Key_Legal_Insights_Compliance_Rules_Benefits\" >Key Legal Insights, Compliance Rules &amp; Benefits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#Common_Mistakes_Legal_Challenges_%E2%80%94_Indian_Foreign_Clients\" >Common Mistakes &amp; Legal Challenges \u2014 Indian &amp; Foreign Clients<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#Expert_Tips_from_Our_Senior_Advocates\" >Expert Tips from Our Senior Advocates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#Conclusion\" >Conclusion<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#%F0%9F%93%8D_Contact_Khanna_Associates_%E2%80%94_Top_Law_Firm_in_Jaipur\" >\ud83d\udccd Contact Khanna &amp; Associates \u2014 Top Law Firm in Jaipur<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/#%E2%9D%93_Frequently_Asked_Questions_FAQ\" >\u2753 Frequently Asked Questions (FAQ)<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_TDS_on_Property_Purchase_from_NRI_%E2%80%94_Complete_Definition_Overview\"><\/span>What is TDS on Property Purchase from NRI? \u2014 Complete Definition &amp; Overview<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When a resident Indian purchases immovable property from a Non-Resident Indian, the buyer is legally required to deduct TDS \u2014 Tax Deducted at Source \u2014 from the payment made to the NRI seller before completing the transaction. This obligation arises under <strong>Section 195 of the Income Tax Act, 1961<\/strong> and applies to the entire sale amount, irrespective of the property value.<\/p>\n\n\n\n<p>This is fundamentally different from Section 194-IA, which governs purchases from resident Indian sellers and mandates only 1% TDS above \u20b950 lakhs. For NRI sellers, the rate is substantially higher and is linked to the nature of the capital gain:<\/p>\n\n\n\n<ul>\n<li><strong>Short-Term Capital Gains (STCG):<\/strong> Applicable slab rate, which can go up to 30% + applicable surcharge + 4% cess<\/li>\n\n\n\n<li><strong>Long-Term Capital Gains (LTCG):<\/strong> 12.5% (without indexation, as amended post-2024) + surcharge + cess<\/li>\n<\/ul>\n\n\n\n<p>For international buyers unfamiliar with Indian tax law, these deductions may appear excessive. However, the <strong>Lower Deduction Certificate (LDC) under Section 197<\/strong> allows NRI sellers to reduce the TDS burden to their actual tax liability \u2014 a provision that the new October 2026 rules have now made considerably faster and more accessible.<\/p>\n\n\n\n<p>For NRI-specific legal support, explore our <a href=\"https:\/\/www.khannaandassociates.com\/nri-legal-services.html\">NRI Legal Services<\/a> practice.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legal_Framework_Regulations_Governing_NRI_Property_TDS_in_India\"><\/span>Legal Framework &amp; Regulations Governing NRI Property TDS in India<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Understanding the governing legal architecture is essential for both buyers and NRI sellers. The <strong>Section 195 TDS deduction framework<\/strong> for NRI property transactions draws from multiple intersecting legislations:<\/p>\n\n\n\n<ul>\n<li><strong>Income Tax Act, 1961<\/strong> \u2014 Section 195 (TDS on payments to NRIs), Section 197 (Lower Deduction Certificate), Section 201 (consequences of default), Section 48 (capital gains computation rules)<\/li>\n\n\n\n<li><strong>FEMA, 1999<\/strong> \u2014 Governs repatriation of NRI sale proceeds, with conditions on permissible remittance amounts and timeframes<\/li>\n\n\n\n<li><strong>DTAA \u2014 Double Taxation Avoidance Agreements<\/strong> \u2014 India holds active DTAAs with over 90 countries, including the USA, UK, UAE, Canada, and Singapore, which can legitimately reduce or eliminate TDS obligations for qualifying NRI sellers<\/li>\n<\/ul>\n\n\n\n<p><strong>New from October 1, 2026 \u2014 Key Reforms:<\/strong><\/p>\n\n\n\n<p>The CBDT has introduced the following changes through its Notification No. [2026 series]:<\/p>\n\n\n\n<ol>\n<li><strong>Form 13 (LDC) processing time reduced to 30 days<\/strong> \u2014 digitally processed on the official tax portal, down from a previous average of 60\u201390 days<\/li>\n\n\n\n<li><strong>PAN-Overseas Identity Integration<\/strong> \u2014 NRIs can now link their PAN with their foreign passport details on the portal, eliminating document duplication<\/li>\n\n\n\n<li><strong>DTAA Auto-Verification Module<\/strong> \u2014 Treaty residency certificates are now verified automatically by the portal, reducing manual scrutiny timelines<\/li>\n\n\n\n<li><strong>Mandatory Pre-Registration of Buyers on TDS Portal<\/strong> \u2014 All buyers purchasing from NRIs must register on the TRACES portal before initiating payment<\/li>\n\n\n\n<li><strong>Penalty Rationalisation under Section 201<\/strong> \u2014 First-time genuine defaults now attract slab-based interest instead of the earlier blanket 100% penalty, reducing financial shock for buyers<\/li>\n<\/ol>\n\n\n\n<p>As the <a href=\"https:\/\/www.khannaandassociates.com\/Best%20Law%20Firm%20In%20jaipur.html\">best law firm in Jaipur<\/a>, Khanna &amp; Associates regularly assists clients through end-to-end NRI property transaction compliance. Our relevant practice areas include:<\/p>\n\n\n\n<ul>\n<li><a href=\"https:\/\/www.khannaandassociates.com\/direct-taxation.html\">Direct Taxation<\/a> \u2014 Tax-efficient structuring of NRI property sales<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/dtaa.html\">DTAA Advisory<\/a> \u2014 Claiming bilateral treaty benefits to reduce TDS<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/international-taxation.html\">International Taxation<\/a> \u2014 Cross-border tax planning for NRI sellers globally<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/property-lawyer.html\">Property Lawyer Jaipur<\/a> \u2014 Comprehensive property title verification and legal due diligence<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/property-documentation.html\">Property Documentation<\/a> \u2014 Sale deeds, agreements, and transfer papers<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/due-diligence-lawyers-jaipur.html\">Due Diligence Lawyers Jaipur<\/a> \u2014 Pre-transaction legal audit and risk assessment<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/income-tax-return.html\">Income Tax Return Filing<\/a> \u2014 Returns for NRI sellers post-transaction, including refund claims<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/power-of-attorney.html\">Power of Attorney<\/a> \u2014 Essential legal instrument for NRIs managing property from abroad<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/real-estate.html\">Real Estate Legal Services<\/a> \u2014 End-to-end real estate advisory in India<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/foreign-direct-investments.html\">Foreign Direct Investments<\/a> \u2014 Structuring FDI-compliant real estate investments<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/construction-legal-services.html\">Construction &amp; Real Estate Law<\/a> \u2014 Regulatory approvals and project-level compliance<\/li>\n\n\n\n<li><a href=\"https:\/\/www.khannaandassociates.com\/rera.html\">RERA Advisory<\/a> \u2014 RERA registration and builder compliance checks<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Legal_Insights_Compliance_Rules_Benefits\"><\/span>Key Legal Insights, Compliance Rules &amp; Benefits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Practical Step-by-Step Compliance Process (Post-October 2026):<\/strong><\/p>\n\n\n\n<p><strong>Step 1 \u2014 Determine NRI Status:<\/strong> The buyer must independently verify the seller&#8217;s NRI status through FEMA documentation and a self-declaration. An incorrect declaration by the seller does not extinguish the buyer&#8217;s TDS liability.<\/p>\n\n\n\n<p><strong>Step 2 \u2014 Compute Capital Gain:<\/strong> Engage a Chartered Accountant to compute the actual capital gain \u2014 factoring in cost of acquisition, cost of improvement, and holding period. This determines the correct <strong>TDS rate for NRI property sale in India<\/strong>.<\/p>\n\n\n\n<p><strong>Step 3 \u2014 Apply for Lower Deduction Certificate (Optional but Recommended):<\/strong> If the seller&#8217;s actual tax liability is lower than the applicable TDS rate, the NRI seller should file Form 13 on the income tax portal. Under new rules, this is processed within 30 days.<\/p>\n\n\n\n<p><strong>Step 4 \u2014 File Form 15CA &amp; 15CB:<\/strong> The buyer must obtain Form 15CB (from a Chartered Accountant) and file Form 15CA online before remitting any amount abroad. Skipping this step is a FEMA violation carrying penalties up to 3x the remitted amount.<\/p>\n\n\n\n<p><strong>Step 5 \u2014 Deposit TDS and File Form 27Q:<\/strong> TDS deducted must be deposited within 7 days (month-end rule) and reported via quarterly Form 27Q. Delay attracts \u20b9200\/day late fees under Section 234E.<\/p>\n\n\n\n<p><strong>Practical Example:<\/strong><br>An NRI seller based in the United Kingdom selling a residential property worth \u20b91.8 crore in Mansarovar, Jaipur \u2014 held for 4 years \u2014 would attract LTCG TDS of approximately \u20b927\u201332 lakhs without an LDC. With an expedited Lower Deduction Certificate under the new rules, and a valid UK-India DTAA Tax Residency Certificate, the effective TDS may be reduced to \u20b98\u201312 lakhs, aligned to actual tax liability. This represents a savings of \u20b915\u201320 lakhs on working capital during the transaction.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Common_Mistakes_Legal_Challenges_%E2%80%94_Indian_Foreign_Clients\"><\/span>Common Mistakes &amp; Legal Challenges \u2014 Indian &amp; Foreign Clients<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Khanna &amp; Associates \u2014 among the top law firms in Jaipur<\/strong> \u2014 regularly sees buyers and NRI sellers commit these critical errors:<\/p>\n\n\n\n<p><strong>1. Applying Section 194-IA Instead of Section 195<\/strong><br>Many buyers incorrectly apply 1% TDS (meant for resident sellers) to NRI transactions. This renders them &#8220;assessee-in-default&#8221; and triggers interest, penalties, and income tax notices \u2014 even though the mistake was unintentional.<\/p>\n\n\n\n<p><strong>2. Remitting Funds Without Form 15CA\/15CB<\/strong><br>Banks are mandated to verify these forms before processing overseas remittances. Buyers who bypass this step face both income tax default proceedings and FEMA penalties.<\/p>\n\n\n\n<p><strong>3. Missing LDC Before First Payment<\/strong><br>The Lower Deduction Certificate must be in place before the first installment is paid \u2014 not at the time of registration. This is the single most costly timing error in NRI property transactions.<\/p>\n\n\n\n<p><strong>4. Ignoring DTAA Benefits<\/strong><br>NRI sellers from the USA, UK, UAE, Australia, Singapore, and Canada may qualify for substantially reduced TDS under <strong>India&#8217;s international Double Taxation Avoidance Agreements<\/strong>. This benefit is frequently unclaimed due to lack of awareness or incomplete documentation.<\/p>\n\n\n\n<p><strong>5. Inadequate Documentation of Cost Records<\/strong><br>Without proper records of original purchase price, improvement costs, and holding period, the Income Tax Department may dispute the capital gain calculation \u2014 extending scrutiny assessments for 18\u201324 months.<\/p>\n\n\n\n<p><strong>6. No Legal Review of Sale Agreement<\/strong><br>Many NRI transactions are executed on developer-drafted or broker-template agreements that lack adequate TDS indemnity clauses, leading to post-registration disputes between buyer and seller.<\/p>\n\n\n\n<p>At <a href=\"https:\/\/khannaandassociates.com\/\">Khanna &amp; Associates<\/a>, our <a href=\"https:\/\/www.khannaandassociates.com\/Best%20Lawyers%20Jaipur.html\">best lawyers in Jaipur<\/a> conduct comprehensive pre-transaction legal audits that prevent every one of these errors \u2014 protecting your money, your property title, and your legal standing.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Expert_Tips_from_Our_Senior_Advocates\"><\/span>Expert Tips from Our Senior Advocates<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Meet our senior advocates<\/strong> at Khanna &amp; Associates \u2014 specialists in NRI taxation, property law, and cross-border compliance \u2014 who share these actionable insights:<\/p>\n\n\n\n<p><strong>1. &#8220;Apply for the Lower Deduction Certificate at Least 45 Days Before Transaction&#8221;<\/strong><br>Even with the new 30-day processing window, documentation preparation for NRI sellers \u2014 especially those in non-English-speaking countries \u2014 can take two additional weeks. Start early and avoid last-minute registration delays.<\/p>\n\n\n\n<p><strong>2. &#8220;Always Compute Actual Capital Gain Before Any Payment Touches the Account&#8221;<\/strong><br>Buyers who deduct TDS on the full sale value \u2014 rather than the verified capital gain \u2014 create refund disputes that can take 2\u20133 years to resolve. A pre-transaction tax memo from a qualified CA plus legal counsel is non-negotiable.<\/p>\n\n\n\n<p><strong>3. &#8220;Independently Verify NRI Status \u2014 Do Not Rely Solely on Seller&#8217;s Declaration&#8221;<\/strong><br>Under Indian tax law, the buyer bears full TDS liability regardless of what the seller declares. Request current NRI status proof including passport, overseas address proof, and FEMA Regulation 7 compliance certificate.<\/p>\n\n\n\n<p><strong>4. &#8220;Structure Joint Property Sales With Dual TDS Computations&#8221;<\/strong><br>When a property is co-owned by one NRI and one resident Indian, different TDS rates apply to each ownership portion. This requires separate computation and separate TDS challans \u2014 a process that demands specialised <strong>international property tax advice in India<\/strong>.<\/p>\n\n\n\n<p><strong>5. &#8220;DTAA Tax Residency Certificates Must Be Apostilled or Notarised&#8221;<\/strong><br>Many NRI sellers submit digital certificates that are rejected by the Income Tax Department. Physical apostilled copies, authenticated through the country of residence&#8217;s designated authority, are mandatory for DTAA claims.<\/p>\n\n\n\n<p><strong>6. &#8220;File Form 27Q Quarterly \u2014 Even If TDS Was Deposited on Time&#8221;<\/strong><br>Many buyers assume TDS deposit is sufficient. Quarterly Form 27Q filing is a separate obligation, and non-compliance attracts \u20b9200\/day late fees from the due date until the return is filed.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>TDS on property purchase from NRI<\/strong> represents one of the most technically complex compliance challenges in Indian real estate law. The October 2026 simplification reforms \u2014 faster LDC processing, DTAA auto-verification, and rationalised penalties \u2014 are a genuine step forward. However, the intersection of Section 195, FEMA regulations, DTAA treaty benefits, and state-level registration laws means that professional legal guidance is not optional \u2014 it is financially essential.<\/p>\n\n\n\n<p>Whether you are a resident buyer in Jaipur, Rajasthan, or an NRI seller based in the United States, United Kingdom, UAE, Canada, or Australia, Khanna &amp; Associates delivers comprehensive, result-oriented NRI property tax compliance \u2014 from initial contract review through post-transaction return filing.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"%F0%9F%93%8D_Contact_Khanna_Associates_%E2%80%94_Top_Law_Firm_in_Jaipur\"><\/span>\ud83d\udccd Contact Khanna &amp; Associates \u2014 Top Law Firm in Jaipur<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><strong>Khanna &amp; Associates<\/strong><br>47 SMS Colony, Shipra Path, Mansarovar<br>Jaipur, Rajasthan \u2014 302020<\/p>\n\n\n\n<p>\ud83d\udcde <strong>+91-9461620007<\/strong><br>\ud83d\udce7 <strong><a href=\"mailto:info@khannaandassociates.com\">info@khannaandassociates.com<\/a><\/strong><br>\ud83c\udf10 <a href=\"https:\/\/khannaandassociates.com\/\">www.khannaandassociates.com<\/a><\/p>\n\n\n\n<p>\ud83d\udc49 <strong>Schedule your consultation today.<\/strong> Do not let TDS complexities cost you lakhs on your NRI property transaction. Our <a href=\"https:\/\/www.khannaandassociates.com\/Best%20Tax%20Lawyers%20Jaipur.html\">best tax lawyers in Jaipur<\/a> are available now.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"%E2%9D%93_Frequently_Asked_Questions_FAQ\"><\/span>\u2753 Frequently Asked Questions (FAQ)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Q1. What is the TDS rate when buying property from an NRI in India in 2026?<\/strong><br>When purchasing property from an NRI seller, TDS under Section 195 applies at 12.5% for Long-Term Capital Gains (held over 24 months) plus applicable surcharge and 4% cess, and at slab rates up to 30% for Short-Term Capital Gains. The October 2026 reforms do not change these base rates but significantly simplify the <strong>Lower Deduction Certificate process<\/strong> for reducing TDS to actual liability.<\/p>\n\n\n\n<p><strong>Q2. Can the NRI seller apply for a Lower TDS Deduction Certificate before the property sale?<\/strong><br>Yes. The NRI seller can apply for a Lower Deduction Certificate (Form 13) under Section 197 on the Income Tax portal. Under the new October 2026 rules, this is processed within 30 days online. The certificate allows the buyer to deduct TDS at a lower, CBDT-approved rate aligned with the NRI&#8217;s actual <strong>capital gains tax liability in India<\/strong>, rather than the maximum statutory rate.<\/p>\n\n\n\n<p><strong>Q3. Is Form 15CA and 15CB mandatory for all NRI property transactions?<\/strong><br>Yes, absolutely. Before any sale proceeds are remitted overseas to the NRI seller, the buyer must obtain Form 15CB (certified by a Chartered Accountant) and file Form 15CA electronically. Skipping this step is both an <strong>Income Tax Act violation<\/strong> and a FEMA offence, carrying penalties up to three times the remitted amount. These forms must be filed before the remittance \u2014 not after.<\/p>\n\n\n\n<p><strong>Q4. How does the India-USA or India-UAE DTAA help NRI sellers on TDS?<\/strong><br>If the NRI seller is a tax resident of a country with which India has a <strong>Double Taxation Avoidance Agreement<\/strong> \u2014 such as the USA, UAE, UK, Australia, or Canada \u2014 they may qualify for a reduced or nil TDS rate under the treaty. To claim this benefit, the NRI must submit an apostilled Tax Residency Certificate (TRC) from their country of residence. The October 2026 portal now auto-verifies DTAA claims, speeding up approvals considerably.<\/p>\n\n\n\n<p><strong>Q5. What happens if the buyer does not deduct TDS when purchasing property from an NRI?<\/strong><br>If the buyer fails to deduct TDS under Section 195, they become an &#8220;assessee-in-default&#8221; under Section 201 of the Income Tax Act. They become personally liable for the entire TDS amount, along with interest at 1.5% per month from the date of payment. Additionally, the Income Tax Department can initiate recovery proceedings against the buyer. Under the new <strong>penalty rationalisation rules<\/strong> effective October 2026, first-time genuine defaults attract a structured slab-based interest rather than a blanket 100% penalty.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are planning to buy property from an NRI in India, your TDS on property purchase from NRI obligations have just changed in your favour. Effective October 1, 2026, the Central Board of Direct Taxes (CBDT) has introduced a landmark simplified compliance framework under Section 195 of the Income Tax Act, 1961 \u2014 making &hellip; <a href=\"https:\/\/khannaandassociates.com\/blog\/tds-on-property-purchase-from-nri\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;TDS on Property Purchase from NRI \u2013 New Simplified Rules from October 2026&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4025],"tags":[7661,8847,8842,8844,8843,8841,8576,8850,8849,8846,8838,8837,4704,8839,8848,8851,8840,8845],"_links":{"self":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/2983"}],"collection":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/comments?post=2983"}],"version-history":[{"count":1,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/2983\/revisions"}],"predecessor-version":[{"id":2985,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/2983\/revisions\/2985"}],"wp:attachment":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/media?parent=2983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/categories?post=2983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/tags?post=2983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}