Section 195 of income tax act provides that : In case of sale of property by NRI, it is mandatory for buyer to deduct 20.66% TDS on the sale price of the property if capital gain is long term capital gain. In case of short term capital gain, TDS will be 33.99% irrespective of income tax slab of NRI

2) you have to deduct 20.66 percent TDS on sale price even if value of property is lss than Rs 50 lakhs

Hello,

Selling of property by NRI is taxable under u/s 195 of the Income Tax Act, 1961. TDS of 1% u/s 194 IA is not applicable if seller is NRI.

You will have to deduct 20.66% TDS on the sale price of the property if capital gain is long term capital gain. In case of short term capital gain, TDS will be 33.99% irrespective of income tax slab of NRI. You will deposit TDS with Income Tax Department. TDS is applicable even if value of property is less than 50 lakhs.

Long Term: Holding property for more than 3 years.

It is advised that you consult a CA or a ta lawyer before proceeding with the same, as depending on the local laws the analysis provided by me would differ.

Regards

He will be considered as NRI if he is a national of some other nation for all the purposes.

STCG and LTCG will be calculated from the date of possession.

Regards

1) profit from the sale of a property is taxed under Short-Term Capital Gains when the resale of the property has been done in less than 3 years from the date of the original purchase of the property.

2) sale agreement date would be considered for calculation of capital gains

3) in the present case seller is Swedish national hence you have to deduct TDS

TDS at the rate of 20.66% is to be deducted under Section 195 of IT Act as the seller is NRI. The value of property is immaterial to this end.

STCG or LTCG is to be computed from the date of possession.

I am an Indian National residing in India since birth. I am currently in process of buying a property (flat) from a person who is a Swedish national as per his passport but has a OCI and is employed, earns salary and resides in Delhi India since 2011 and he pays Income tax in India through his PAN. The Seller has asked me to do all sale related payments into his NRO account of ICICI Bank. Under which Income Tax Section do I need to deduct TDS in this case while making payments to him? the property value is less than 50lacs. How much is the TDS since he bought flat in 2010 but got possession of his flat from builder only in 2016 and is selling it to me now in 2017.

You should not worry about when he bought the property and when he is selling it.

It is his problem to pay capital gains tax to the government if his selling attracts the same.

You are buying a property from a foreigner/OCI/NRI hence you have to follow the rules of TDS as applicable.

When a Non-resident sells an Immovable property in India, Capital gains income may accrue on such sale to the Non-resident which is chargeable to tax in India. Therefore, the consideration from sale of property in India by a non-resident is chargeable to tax in India and is covered by Section 195 and therefore tax has to be deducted at the time of payment of such consideration.

The buyer/ transferee has to deduct tax on sale of immovable property by the non-resident at the slab rate prescribed in case property is sold within three years of its purchase and at the rate of 20% where property is sold after three years of its purchase i.e where LTCG accrues.

Also for STCG or LTCG is Sale agreement date considered or possession date considered?

Sellers bought flat in 2010 but got his possession only last year i.e. in 2016.

Date of registration of property in his name shall be date of computation for calculating LTCG or STCG; you can verify that.

Since your seller is a Swedish citizen, the NRI rules what you say will not apply to a foreigner