Sale of Immovable Property by a Non-Resident

Income Tax shall be deducted by the buyer/purchaser/transferee on payment against the purchase of immovable property.

These points must be kept in mind for dealing with Non-Resident for transfer of immovable property-

• Purchaser is responsible for the deduction of tax and pay the amount to the Government account.
• Tax shall be deducted at the time of payment or credit to the seller/transferor whichever is earlier.
• Buyer needs to have a Tax Deduction Account Number (TAN)
• The buyer/transferee must deduct tax on the sale/transfer of immovable property by the non-resident at the rate of 20% plus surcharge & cess in case property is sold/transferred by non-resident after two years of its purchase and at the rate of 30% plus surcharge & cess in case the property is sold/transfer within two years or less of purchase by the non-resident seller/transferor.
• Rates for surcharge are:
  • 10% if consideration value exceeds fifty lakh up to one crore
  • 15% if consideration value exceeds one crore up to two crore
  • 25% if consideration value exceeds two crore up to five crore
  • 37% if consideration value exceeds five crore.
• Tax deducted needs to be deposited into the Government account on or before the 7^th of the next month. In the case of March the same needs to be remitted by 30^th April.
• Delay in deduction and remittance of tax in government account will attract penalty and interest.
• After the deposit of TDS, the buyer is also required to furnish an online quarterly TDS statement in form 27Q.
•  Delay in filing of TDS return will attract a mandatory late fee of INR 200/- per day under section 234E.