TDS has to be deducted at 20.66 per cent
There is no tax implication on the buyer while buying this property except he has to deduct tax at source and remit it to the government account properly.
Taxes on purchase of land from a foreign citizen
Hello Lawyers, I need help with following question. I am an Indian citizen (have pan and adhar) and buying a plot from a Foregin citizen (don’t have Pan and adhar). During purchase will I be paying any other taxes except Stamp duty and Govt fee/registration fee. What is the process of buying a plot from a Foregin national. Please let me know. Regards, Shwetha.
Asked 2 years ago in Property Law
Religion: Hindu
7 Answers
You have to deduct taxes at source while making the payment towards sale consideration @ 22% of the sale consideration value, this is besides the stamp duty and registration charges.
After that you have to remit the TDS amount to the government account within a month and issue the receipt copy to the seller.
1. The buyer has to have TAN number since you are buying the plot from a foreign citizen.
2. Whatever may be value of the property (Since you are buying it from a foreign citizen) you have to deduct the statutory tax amount in the name of seller to the Income Tax authorities and pay the remaining consideration amount to the seller. Apart from this you have to pay the stamp duty+cess+registration fee to the State Government.
Dear client,
A resident Indian may acquire immovable property outside India from a non-resident:
a. By way of inheritance.
b. By way of purchase out of foreign exchange held in a resident foreign currency account (RFC), which is a savings account maintained in foreign currency for Non-Resident Indians, who have returned to India and hold funds in foreign currency.
c. By way of purchase out of the remittances sent under the Liberalised Remittance Scheme (LRS) that allows remittances by resident individuals up to $250,000 per financial year for any permitted current or capital account transaction or a combination of both.
d. Jointly with a relative who is a person resident outside India.
e. Out-of-income or sale proceeds of assets outside India (other than Overseas Direct Investment or ODI).
Hope this helps you.
TDS may be applicable to the foreign seller
No different process. Same stamp duty and process of purchase. if sale is above 50 Lacs, 1% TDS will deduct.
- As per law , a foreign citizen of India origin can only sell residential or commercial property in India to a person residing in India or to an NRI or a person of Indian Origin.
- Hence, being an NRI , you can only purchase residential or commercial property in India without getting permission of RBI .
- You should deduct TDS @ 20% from the sale consideration amount of the property to pay the government.
