Lower Tax Certificate on Sale of Properties by NRI

As per Section 195 of the Income Tax Act, payment to a Non resident, be it sale consideration towards the sale of property, Rent, Interest, Professional fees, commission, royalty, etc., is subject to Tax Deduction at Source (TDS).

Suppose, an NRI sells a flat in Bangalore for Rs.90 lakhs, the buyer of the property has to deduct TDS at 22.88% (FY 2018-19).

In order to reduce the TDS burden, the seller of the property can apply to the department to issue a certificate for deduction of lower rates or no deduction of tax.